Less than a year since the first rumblings that Newbridge Networks was a prime take-over target, the Canadian networking giant is to become part of French mobile phones to metallurgy company Alcatel. Talk of the merger started to break over the weekend and now the boards of both companies have agreed the deal should go ahead. The final details of the agreement were thrashed out late last night and the announcement was made this morning. Alcatel is offering to convert each Newbridge share into 0.81 of an Alcatel share. Based on closing prices of just over US$48 for Alcatel and US$34.38 for Newbridge, this values Newbridge shares at US$38.68 and gives the deal a value of around US$7.1 billion. Newbridge become part of Alcatel's Carrier Data Division (CDD) which will be renamed as the Carrier Internetworking Division. Prior to deal, CDD was expected to record revenues in excess of US$1 billion in 2000. The new CID is expected to have combined annual sales of more than US$2.5 billion, according to a Newbridge statement. Pearse Flynn, Newbridge president and COO will become president of CID, which will be based in Canada. Despite its size, all has not been plain sailing for Newbridge. 1998 was dogged by a string of profit warnings that saw its share price fall to below US$30 and gave rise to the first rumours of impending takeover. The picture improved last year and for its third quarter, ending 30 January 2000, Newbridge recorded revenue of $521 million. Which was more than eight per cent up on the previous quarter. Newbridge shareholders have yet to approve the deal. ® See also: Alcatel snaps up Newbridge Take-over talk targets Newbridge