AT&T Corp has so completely got over the disappointment of its failed European adventure with Ing C Olivetti & Co SpA a decade ago that it is apparently ready to have another try, this time with Compagnie des Machines Bull SA. The French Industry Ministry is not commenting on a report in Les Echos that AT&T has teamed up with Quadral SA, the holding company that controls the signalling equipment firm Compagnie des Signaux SA to buy a 40% stake in the company, but a source familiar with the deal confirmed that many details of the report are correct, according to Dow Jones & Co. The source cautioned that final details of the proposal to be submitted to the French government are still being worked out. Les Echos suggests that AT&T and Quadral will create a holding company 51% owned by the French partner, which would take a 40% stake in Bull. The French government currently holds 75.8% of Bull, state-owned France Telecom another 17%, NEC Corp 4.4%, IBM Corp 2.1%, with a vestigial 0.7% traded on the Paris Bourse. One way or another, if the only companies seen as ready bidders for stakes in Bull do go ahead, Bull is going to find itself trying to market a large volume of telecommunications equipment – something it has little experience with. NEC has made it clear that if it increases its stake it will expect Bull to start marketing products such as its PABXs, Asynchronous Transfer Mode switches and public telephone equipment, and it is pretty clear that that is what AT&T is after as well: no alliance between Bull and AT&T’s former NCR Corp seems likely – all of which seems to set the seeds for deep conflict between AT&T and NEC. Bull, with France Telecom holding 17%, selling AT&T equipment is not going to go down too well with France’s telecommunications champion Alcatel NV. Apart from supposedly being able to deliver the French market, an attraction of Bull for giant companies like NEC and AT&T that are home-market bound is its presence in hard-to-reach places such as Eastern Europe and Francophone Africa.
