Alcatel merges with Lucent Technologies

Source : www.gigaOM.com

Alcatel and Lucent Technologies have finally decided to tie the knot and merge their two companies, in what amounts to be a gigantic first step in the telecom hardware consolidation.

The combined company will have a market capitalization of $36 billion, and will have sales of around $25 billion and will have 88,000 employees. This is not really a merger of equals, and if you read the terms of the deal, its Alcatel swallowing Lucent.

Serge Tchuruk, chairman and CEO of Alcatel who will become non-executive chairman of the combined company and Patricia Russo, the chair(wo)man and CEO of Lucent will become CEO of the combined company.

Reasons for the marriage:

The carriers desire for IMS, the technology that would let them merge the wireline and wireless networks. Lucent has done great work in that space, and the combined company will do well because of that. In addition, it solves Tchuruk’s transition dilemma. He did not have a #2 and with his time was running out - well you know how it is!!!