Alcatel and Lucent announced their merger deal this morning, a combination that signals the unofficial kick-off of what will probably be a vigorous round of consolidation in the communications tech sector. Although the company will be headquartered in Paris, it will be led by an American (and female!) CEO Patricia Russo, who is currently the Chairman/CEO of Lucent.
The merged tech giant will have a market cap of around $36 billion and annual revenues of around $25 billion, based on 2005 revenues, and count around 88,000 employees, although plans call for cutting the combined workforce by 10%. The annual “cost synergies” the companies expect to achieve with the merger are estimated to be around $1.7 billion within three years following the deal’s close.
One quirk with this merger is the French incorporation and high level of French government ownership of the new company — Lucent’s Bell Labs conducts sensitive research for the U.S. military and security agencies and will set up a separate, independent U.S. arm that works on those government contracts.
Stay tuned for more mergers as tech suppliers cope with the increasing consolidation in their telco customer base. Nortel, Siemens, Ericsson and other top communications tech companies are all in deep talks about how to stay alive as their phone company customers get bigger and become more potent negotiators.
Cynthia Brumfield at 12:33 PM|Comments(0)
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