Alcatel, Lucent shareholders weigh giant merger
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Shareholders in French telecommunications equipment maker Alcatel and US group Lucent were holding separate general assemblies on a merger to create a giant valued at 21.5 billion euros (27 billion dollars).
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InfoWorld - Alcatel-Lucent has invested in WiMax chip maker Sequans Communications, the latest show of support for the emerging long-range wireless networking technology.
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Alcatel-Lucent's revenue fell for the fourth quarter and the company plunged into loss. The performance was disappointing, but theÂ long-term prospects of the mergerÂ of Alcatel and Lucent Technologies remain positive, the company said.
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The deal follows Alcatel&#039;s April plan to acquire Lucent  Technologies Inc. to create the world&#039;s top telecoms gear maker  by annual sales, and comes years after Wall Street analysts  have called for mergers in the crowed sector.
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Now that wireless is officially a land of giants, what happens to all the Lilliputians? With Sprint and Nextel announcing their merger Wednesday â- $35 billion deal
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Shareholders at Alcatel CGEP.PA and   Lucent Technologies Inc. LU.N on Thursday separately voted in   favor of a merger under which the French telecoms equipment   firm buys its U.S. rival in a $10.9 billion deal.
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(InfoWorld) - Alcatel-Lucent's revenue fell for the fourth quarter and the company plunged into loss. The performance was disappointing, but theÂ long-term prospects of the mergerÂ of Alcatel and Lucent Technologies remain positive, the company said. Fourth-quarter revenue dropped 16 percent year-on-year on a comparable basis, to â¬4.42 billion ($5.83 billion as of Dec. 31, the last day of the period reported) from â¬5.25 billion, while revenue for the full year fell to â¬18.25 billion from â¬18.57 billion. Although the merger was onlyÂ completed at the end of November, the company provided pro-forma figures as if the merger had taken place on Jan. 1, and restated earlier figures on a comparable basis. On that basis, the company made a net loss of â¬618 million in the fourth quarter, compared to a net profit of â¬381 million a year earlier. For the full year, net profit fell to â¬522 million, down from â¬1.67 billion on a comparable basis the previous year. The disappointing performance was due to uncertainty among customers and staff about the outcome of the merger, and to a highly competitive market in North America during the fourth quarter, the company said. As it proceeds with the integration of Alcatel and Lucent, the company expects to realize cost savings of â¬600 million this year, and a total of â¬1.7 billion in cost savings within three years of the merger. The savings will come from optimization of its supply chain, and the elimination of duplicate resources and products, and around 12,500 jobs. Post-merger, the company makes around three-quarters of its revenue from carrier products. Revenue of â¬1.47 billion came from fixed-line telecommunications equipment in the fourth quarter, â¬1.24 billion from wireless equipment, and â¬510 million from converged products. Enterprise networking equipment accounted for â¬410 million, and services for â¬740 million. Demand was particularly strong for enterprise IP telephony equipment in Europe, the company said.
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By Victoria Shannon  A cloud of uncertainty among the world's phone companies left Alcatel-Lucent with a heavy net loss Friday in its first quarterly report as the world's largest telecommunications equipment maker, and the company moved to eliminate thousands more jobs.
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(InfoWorld) - Alcatel-Lucent, a global communications giant with combined annual revenue of more than US$24 billion, will debut Friday after a sometimes rocky engagement between Alcatel SA and Lucent Technologies Inc. The deal closed Thursday,Â about eight months after it was announcedÂ and followingÂ national security concerns,Â investor lawsuitsÂ and one close shareholder vote. On Friday, the company is set to begin trading on the Euronext Paris exchange and the New York Stock Exchange under the ticker symbol ALU. Both companies were among the largest suppliers of wired and wireless infrastructure, and the combined entity boasts impressive statistics: 79,000 employees in 130 countries, about 23,000 of whom work in research and development, a services team of more than 18,000, and customer relationships with the 100 largest service providers in the world. The consolidation comes as carriers, the consumers of telecommunications gear, also combine into fewer and bigger entities. The new company will be incorporated in France and based in Paris but run by Chief Executive Officer Patricia Russo, the American outgoing chief of Lucent. Alcatel head Serge Tchuruk is a non-executive chairman of the board. Both were appointed Thursday. Bell Labs, Lucent's venerable research unit, will remain in New Jersey and a special business will be set up to handle sensitive U.S. government contracts. Alcatel will sell its satellite business to ease national security concerns in France. The deal came under fire from some investment firms and shareholders. In September, Lucent settled two proposed class-action lawsuits by investors that threatened to delay its shareholder vote, and the deal then passed with less than 52 percent of the vote. The last key hurdle was approval by the U.S. Committee on Foreign Investment In the U.S. (CFIUS), which earlier this month signed off on the deal on the condition that the companies execute national security agreements with certain U.S. government agencies. Alcatel-Lucent expects to gain significant savings within three years from cutting about 9,000 jobs, consolidating support functions, optimizing its supply and procurement system and leveraging its research and services operations across a larger base. The company will discuss the news on a webcast on Friday at 1 p.m. Central European Time (12 p.m. GMT).
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(InfoWorld) - The first week of September, the unofficial start of the new season, has been hectic for IT investors. Analysts are scrambling to parse through news from networking giants Cisco Systems Inc., Alcatel SA and Lucent Technologies Inc., and a board fracas at Hewlett-Packard Co. caused the company to come under the scrutiny of the U.S. Securities and Exchange Commission as well as the California State Attorney General. The big question for Wall Street analysts and institutional investors attending the Cisco Systems Inc. analyst day in New York Wednesday was whether the vendor could sustain its revenue and profit momentum. Executives lead by Chief Executive Officer John Chambers said that by incorporating data, voice, video and mobile capabilities -- its so-called "quadruple play" -- across all its product lines, Cisco can take advantage of converging networks in the service provider, enterprise, commercial and consumer markets. The company reiterated its forecast of 10 percent to 15 percent growth for the next three to five years. But more importantly, in wide-ranging give-and-take with the Wall Street community, company executives appeared very confident about specific details that backed up the forecast. "They were very bullish," noted Mark Sue, an analyst with RBC Capital Markets. Sue said that two good signs were the company's confidence that it could keep its tax rate down to current levels (hovering around 25 percent) and Chief Financial Officer Dennis Powell's statement that the company would pay out a dividend at some point. The company did not get an uptick after the meeting, even though some analysts said they thought shares have a lot of potential to move upward. Part of the problem may be that Cisco was caught in the general market depression this week, as a result of reports of slowing housing sales. Cisco (CSCO) closed at US$21.54 Thursday, down $0.15. Meanwhile Alcatel SA and Lucent Technologies Inc. shareholders approved the merger of the two networking vendors Thursday. The merger is seen as part of a trend toward consolidation in the networking and telecom markets. There is intense competition in the growth areas of the mature enterprise market -- such as VOIP -- while Chinese manufacturers are putting pressure on the Western networking giants on the low end. IT investors are taking a wait-and-see approach to Alcatel-Lucent. On Thursday, Lucent (LU) shares closed at $2.25, down by $0.02, while Alcatel shares (ALA) closed at $11.77, down by $0.24. On his part, Cisco's Chambers sees his greatest competition coming from Asia, not Paris or New Jersey. A board disagreement at HP, meanwhile, is a sign of the times. An internal investigation by HP to see which members of its board of directors leaked information to the press resulted in several board members leaving earlier this year. One departed board member, Silicon Valley venture capitalist Thomas Perkins, has accused HP of using possibly illegal means to conduct its investigation, sparking newly revealed government inquiries. However it ends, the squabble is seen to signify the end of an era when board members were all good friends of the chief executive. The leaks stemmed back to the time when the board started having critical discussions of ex-CEO Carly Fiorina. Though current CEO Mark Hurd appears to be well on the way to a healthy reorganization of the company, the board infighting could be a distraction. HP (HPQ) shares closed at $35.42 Thursday, down by $0.42.
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(InfoWorld) - Lucent Technologies has averted a potentially embarrassing delay of its shareholder vote on a merger with Alcatel,Â settling two suits by shareholdersÂ who said the deal doesn't maximize shareholder value. Lucent and AlcatelÂ agreed in April to mergeÂ into a global communications vendor that would have about $25 billion in annual revenue. Both companies plan to hold shareholder votes to approve the deal on Thursday. Plaintiffs in Resnick vs. Lucent Technologies Inc. wanted to postpone Lucent's vote, and the company was due at a hearing Wednesday in the Superior Court of New Jersey in Union County to fight that move. Another group of shareholders pursuing a similar suit, Asa R. Maley Trust vs. Lucent, also would have joined the hearing. Now Lucent won't have to face the danger of a legal entanglement the day before its planned vote. Both suits were intended as class actions on behalf of owners of Lucent stock. Terms of the settlement Lucent reached with them will be disclosed later, the company said in a filing to the U.S. Securities and Exchange Commission on Friday. The Lucent-Alcatel deal would be one of the biggest shifts yet in the consolidation of both service providers and vendors in the telecommunications industry. Both the U.S. Federal Trade Commission and the European Commission have approved the plan, but it still faces opposition from some investment firms and needs the blessing of the Committee on Foreign Investment in the U.S. Lucent is based in Murray Hill, New Jersey. The merged company, to be called Alcatel Lucent, would have its headquarters in Alcatel's base of Paris. Â ADVERTISEMENTMAKE SOA REAL WITH IBM WEBSPHERE PODCASTStreamline processes and maximize efficiency within a proven service oriented architecture. Take back control of your business processes with IBM WebSphere.
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Lucent Technologies has averted a potentially embarrassing delay of its shareholder vote on a merger with Alcatel,Â settling two suits by shareholdersÂ who said the deal doesn't maximize shareholder value.
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Alcatel-Lucent said it plans further layoffs after its post-merger financial performance continued to disappoint.The company fleshed out its three-point plan for restoring profitability on Wednesday, including a renewed focus on products to help carriers transform their networks to an all-IP (Internet Protocol) infrastructure, a move from products to value-added services, and a more streamlined organization with fewer staff in support functions to eliminate post-merger duplication. It will cut a further 4,000 jobs by 2009, in addition to the thousands it has already shed, and hopes the moves will save it a further &#8364;400 million (around $575 million) by that date, it said.In another change, Alcatel will reduce its senior management team to seven members, from 11, and&#160;Chief Financial Officer Jean-Pascal Beaufret will leave, to be replaced by enterprise systems group head Hubert de Pesquidoux.Alcatel-Lucent&#39;s board has expressed its disappointment with the&#160;decline in performance&#160;since the Dec. 1&#160;merger of Alcatel and Lucent Technologies, but expressed its continued support for CEO Patricia Russo earlier this month. Russo has the board&#39;s support for her plan to restore the company to profitability, she said Wednesday.&quot;It&#39;s not a plan solely focused on cost. It&#39;s also focused on growth,&quot; she said in a conference call with analysts.As part of the plan, the company will simplify its regional structure, dividing the world into just two regions, the Americas and the rest. It will also pull out of between 10 and 20 countries where its margins are too slim to make a profit, Russo said. In those countries it will pursue &quot;an alternative strategy where we can continue to support customers but through different means,&quot; she said.For the quarter ended Sept. 30, the company reported revenue of &#8364;4.35 billion, a fall of 11.4 percent compared to the &#8364;4.91 billion that the two companies made a year earlier. Alcatel-Lucent provided comparable figures for the companies&#39; performance before their merger on Dec. 1.Currency fluctuations hurt the company&#39;s performance: the decline in revenue would have been 7.8 percent at constant exchange rates.Alcatel Lucent remains in the red, with a loss of &#8364;345 million this quarter, or &#8364;258 million excluding restructuring charges, compared to a comparable net profit of &#8364;532 million for the companies a year earlier.Alcatel-Lucent is still hoping for a &quot;solid ramp up in revenue&quot; in the fourth quarter, but seems less optimistic: it now says revenue for the full year will remain flat, rather than &quot;flat or slightly up&quot; as it predicted last month. The company offered no guidance on earnings for the full year.Revenue from the company&#39;s largest business segment, carrier networks, dropped 15.2 percent year on year to &#8364;3.14 billion, while operating profit for the segment fell from &#8364;389 million to &#8364;22 million. Alcatel-Lucent said the decline was exaggerated by the comparison with unusually strong sales of CDMA (code division multiple access) wireless networks in North America in the third quarter last year, as operators rushed to deploy a performance-enhancing software upgrade.The company has converged two of its three CDMA platforms since the start of the year, and expects to merge the remaining two by the third quarter of next year, Russo said. Going forward, it will focus research and development spending on new revenue opportunities such as the transformation of wireless networks to all-IP systems.As part of its restructuring, the company will eliminate a layer of management, merging the wireless, wireline and convergence networks divisions of the carrier networks business segment.Services revenue remained flat at &#8364;777 million, while operating profit in that sector fell to &#8364;40 million from &#8364;60 million a year earlier. The company sees services around the delivery of IPTV (Internet Protocol television) programming as a strong area.One bright spot was the company&#39;s enterprise networks business, where revenue rose to &#8364;380 million from &#8364;362 million a year earlier, with operating profit rising to &#8364;29 million from &#8364;24 million a year earlier. The move by businesses from traditional switched telephone systems to VOIP (voice over IP) on internal networks was a key driver, the company said.This article was updated with new information on October 31, 2007.
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The size of the Cingular/AT&amp;T Wireless merger could present integration challenges as AT&amp;T Wireless customers migrate to new calling plans and new equipment.
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Telecommunications gear maker  Alcatel-Lucent  could cut more than 20 percent of its  world-wide staff, L'Expansion weekly said on Tuesday on its  Website, citing industry sources.
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Shareholders in ABN AMRO   will weigh three key events in the coming week to decide which  of two rival bidders will clinch control of the Dutch bank  after a six-month takeover battle.
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Recently-merged Alcatel-Lucent  is stepping up job cuts to 12,500 after dipping into a fourth quarter loss and forecast a sales drop in the first quarter as tough trading and uncertainties related to the tie-up took their toll.