Alcatel has agreed to flog off its ADSL modem business to French consumer electronics company Thomson Multimedia.

The deal, based on a trade of the business in return for Thomson shares, is valued at Euro 456 million ($387.40 million). To go ahead, the alliance requires the support of Thomson shareholders, Alcatel's employees, and French and European regulatory authorities.

If the deal is given the go-ahead, both companies expect the transfer to be completed by the end of the year.

The plan is part of Alcatel's desire to focus on telco-oriented network infrastructure products, which was, incidentally, one of the drivers behind its failed scheme to merge with Lucent. Thomson, on the other hand, wants to break into the consumer Net broadband access market.

The progress of the deal will be watched by Linux users with ADSL connections. They have only recently won Alcatel's backing to get the driver technology behind its USB ADSL modems out into the open source community.

Thomson has yet to state its attitude toward open source, but it's hoped that the company will continue to support the community.

Last year, Alcatel's ADSL products accounted for around 22 per cent of the ADSL modem market, according to figures from European market researcher Dell'oro. ®

Related Stories

Alcatel ships Linux USB ADSL driver
Alcatel says 'yes' to Linux USB ADSL support
Linux people petition Alcatel for USB ADSL drivers