Lucent, Alcatel finalise merger
Alcatel and Lucent Technologies have agreed on a $13.4 billion merger that will create a French-American telecommunications equipment maker with revenues of $25 billion, 88,000 employees and phone company customers straddling the globe.

The deal comes due to the increasing competition telecommunications firms in developed countries in the west are facing from low-cost Asian manufacturers. If Alcatel and Lucent successfully combine their operations, it could prompt competitors like Ericsson, Nortel Networks and Siemens to look for mergers in order to keep pace.

The combined company, as yet unnamed, would be based in Paris, where Alcatel has its headquarters. Lucent's Bell Labs research center would remain in Murray Hill, N.J. Serge Tchuruk, Alcatel's chairman and chief executive, would be the nonexecutive chairman, and Patricia F. Russo, Lucent's chairman and chief executive, would become chief executive of the new company.

Under the deal, Lucent shareholders would receive 0.1952 of an Alcatel American depository share for each Lucent share, valuing the company at about $3.01 a share based on Alcatel's closing stock price on Friday, or about 4 cents less than Lucent's Friday closing price. After the merger, Lucent shareholders would own 40 percent of the combined company, with Alcatel shareholders owning 60 percent.

Created in 1925 by AT&T as a research subsidiary, Bell Labs has helped develop a wide range of commercial and military technologies, from the transistor to ballistic missiles. The labs became a part of Lucent when the company was spun out of AT&T in 1996.
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