COLLAB distinguished with the APDC / Siemens Innovation Award

Alcatel and Lucent agree merger without negative consequences for Portugal

COLLAB distinguished with the APDC / Siemens Innovation Award

Alcatel and Lucent reached an understanding of the merger of their operations. Recently the two companies had already confirmed the existence of negotiations, which now result in the acquisition of 60 percent of the capital of the American company by the French manufacturer, for 13.4 billion dollars.

Together, the companies create a giant in telecommunications products and services with a strong presence in the American equipment market, on the Lucent side, and in the European, Chinese and African infrastructure market, on the Alcatel side, with joint annual billing of $ 25 billion.

«Competition is increasing and the size and scale really matter» justifies in conference call Lucent’s CEO, Patricia Russo, who will become CEO of the new company, yet to be named.

Worldwide, the two companies admit to giving up 10 percent of their workforce to eliminate duplication, a measure not foreseen in Portugal. José Vieira, Alcatel’s communications director, explained to TeK that «the added value of joining the two companies is so great that we do not foresee the need to reduce people».

The official points out, however, that the deal will only be concluded in a period of 6 months to a year, since it requires authorizations from the American and European regulatory authorities and it will be during this period that the local officials will define the merger patterns for each country.

José Vieira stresses that «the prospects are sincerely positive» in terms of business evolution, both locally and internationally, and points out that both companies are betting heavily on the next generation networks (MGM), which will allow customers to join and get an interesting position in the market. Each of the companies now manages 7 to 10 projects in this area. Together they maintain another 140 trials in several countries around the world, including Portugal.

It is recalled that already in 2001 the two companies had carried out negotiations to merge operations. This first round of negotiations was unsuccessful because Lucent did not relinquish its intention to hold a majority position in the new company. In Portugal, Alcatel directly employs 350 employees and indirectly as many. Lucent employs a few dozen employees.

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2006-03-24 – Alcatel and Lucent Technologies are in talks for an eventual merger