Feeds

Lucent jilts Alcatel at the Altar

What would the neighbours think?

  • alert
  • submit to reddit

The essential guide to IT transformation

Lucent and Alcatel have called off their merger talks, the pair announced today in a terse but cordial joint statement.

But why? It appears that Lucent was worried that the deal would be perceived as a takeover, rather than a merger, according to sources cited by WSJ.com. Also, Lucent wanted a stronger representation in an enlarged board.

The talks, confirmed by the two companies only today, had already thrashed out an agreement to exclude Lucent's Agere Systems from the transaction, WSJ.com says. This company, worth $7bn, was destined for Lucent shareholders alone.

So the sticking point for what was to be a $23bn nil deal comes down to vanity. Of course it was a takeover. Alcatel, the smaller of the two, would have been in the driving seat - and deservedly so, considering the cash-crunching mess-up on the pavement created by Lucent's management.

Alcatel's shareholders will possibly relieved that the company failed to ensnare Lucent.

It's all too easy to see the problems that could have arisen from trying to consolidate two very big companies with two very different cultures while pretending that both sides were in charge. However, this was a big chance for Alcatel to storm into the very top tier. Oh well, there's always Nortel.

But whither Lucent? The company's overriding need is for quick-fix cash to pay back its huge debt. Alcatel's nil-premium share offer was not that quick fix - which means it will be easy enough to pacify shareholders and debtholders. Their immediate needs will be served - in common with Xerox and BT debtholders - by business unit sales at, so long as it's cash, at knockdown prices. The upshot is that Lucent is not in the business, right now, of getting bigger. ®

5 things you didn’t know about cloud backup

More from The Register

next story
True fact: 1 in 4 Brits are now TERRORISTS
YouGov poll reveals terrible truth about the enemy within
Microsoft exits climate denier lobby group
ALEC will have to do without Redmond, it seems
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?