The merged company will be traded on Euronext Paris and the New York Stock Exchange under a new ticker ALU.
Alcatel-Lucent expects to save about 1.4bn euros, or roughly $1.8bn, within three years as a result of the deal. Within that time, about 9,000 workers will have their jobs cut, as the company consolidates various functions, including support, supply chain and procurement.
Most of the restructuring will occur within two years, according to the company. It currently has more than 79,000 employees, of which about 23,000 are in R&D.
Our combined company is ideally positioned to help our customers transform their networks so they can offer new kinds of personalized, blended applications and services, said Alcatel-Lucent’s newly appointed chairman Serge Tchuruk.
Both companies’ shareholders approved the all-stock acquisition of US-based Lucent, a former rival of France-based Alcatel, on September 7.
While the deal was originally touted as a merger of equals, Alcatel shareholders now control about 60% of the new company. But the board is evenly split between former Alcatel and Lucent directors.
Combined, the companies generated $25bn in revenue in 2005, which gives it about 18% of the global telecom equipments market.
The company now has a broader portfolio, including IPTV, broadband access, carrier IP, IMS and next-generation networks, and 3G spectrum UMTS and CDMA. Moreover, it now has a better global spread, with North America, Europe and Asia each driving roughly one-third of total combined revenues.
However, there are sure to be cultural and organizational challenges of merging a New Jersey and Paris-based company.
Alcatel-Lucent’s telecom operations will be split into five business groups: wireline; wireless; convergence, which will target the carrier market; enterprise; and service.
