President Bush Approves Lucent-Alcatel Merger

By Mae Kowalke

TMCnet Associate Editor

 

U.S. President George Bush put his seal of approval Monday on the $11.8 billion merger of Lucent Technologies (News - Alert) and Alcatel.

 

Reuters noted in a report that Bush’s approval came on the heels of concerns that lawmakers had raised about security for classified government work Lucent’s Bell Labs performs (including communications systems for Defense Advanced Research Projects Agency).

 

Apparently Bush was satisfied with the companies’ promise to create an American-run unit for sensitive contracts.

 

Reuters noted that the Committee on Foreign Investments in the United States (CFIUS) spent 75 days investigating security implications of the merger; once the committee gave Bush the final thumbs up, he went ahead and gave his approval before Tuesday’s statutory deadline.

 

Lucent and Alcatel (News - Alert) announced November 17 that CFIUS had given the green light to proceed with the merger.

 

Plans for the merger were announced April 2, and shareholders from both companies approved the deal September 7. The road to closing the deal has been a somewhat rocky one; in addition to the security concerns, over the summer two lawsuits against Lucent (claiming the company failed its duties to shareholders) had to be settled.

 

It appears now that all hurdles have been overcome for the merger. Reuters reported that the two companies expect to finalize the deal by November 30.

 

“When the marger is finally consummated- within weeks, the combined Paris-based company will have around $25 billion in sales as well as an 18 percent share of the international telecom equipment market,” TMCnet blogger Russell Shaw noted in a post Monday.

 

Lucent stocks trading on NYSE were unchanged at closing Monday ($2.62), but Alcatel stocks at 4:01 p.m. ET were at $13.56, up 0.44 percent from previous close of $13.50.