Lucent May Be Takeover Target

Alcatel SA on Monday declined to comment on a report that the French telecommunications equipment supplier could announce a reported acquisition of U.S. rival Lucent Technologies Inc. this week.

"Our official line is: No comment," Alcatel spokesman Klaus Wustrack said.

Lucent spokesman Bill Price also declined to comment about the report published Monday by The Wall Street Journal on its Web site.

According to the Journal, both companies met during the weekend in Paris to discuss the $32 billion (37.2 billion euros) all-stock deal. The Journal, citing people familiar with the discussions, said both companies could present the terms of the deal to their respective boards Tuesday for approval. A formal announcement could come as soon as Wednesday.

Murray Hill, N.J.-based Lucent, spun off from AT&T Corp. in 1996, has faced a string of strategic missteps and profit disappointments that led to the departure of Lucent`s chief executive and a major restructuring.

Alcatel has in the past expressed an interest in Lucent`s fiber-optics business, which the U.S. company is spinning off.

Analysts said a purchase of Lucent by Alcatel, which chief executive Serge Tchuruk has built into a diversified maker of cell phones, high-speed telecommunications equipment and Internet switches, would make it a major player in the U.S. market.

More than half of Alcatel`s sales are in Europe, while 23 percent of its revenue comes from the United States.

But Alcatel`s center of gravity has been moving toward North America. In the last four years, it has made acquisitions worth $17 billion in North America while selling businesses, mainly in Europe, valued at a total of $11 billion.

Last year, it bought Ottawa-based switch maker Newbridge Networks for $7.1 billion and in 1998 it bought U.S. optical equipment maker DSC Communications.

The French company, which has been private for most of its 103-year history, was nationalized by the French government in 1981 before being returned to the private sector five years later.

(Copyright 2001 by The Associated Press. All Rights Reserved.)

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Author: 6 ABC - Action News