Network equipment manufacturers Alcatel and Lucent Technologies are
inching closer to a marriage as the boards of both companies have
approved additional discussions that could lead to a $34bn (£23.9m)
merger, according to a report published yesterday.
The board meetings aimed to brief directors on the status of the
talks and to discuss details of a potential merger. No board action
was required, but the meetings are considered significant as they
show the discussions are advancing, The Wall Street Journal
reported yesterday.
A merger could bring about massive annual savings of about $4bn,
thanks to synergies within the companies' businesses, the report
said.
A spokesman for Lucent in London declined to comment, saying the
company considers the report to be based only on "rumours and
speculation in the marketplace."
France's Alcatel proposed acquiring US-based Lucent in a stock swap
deal and the two sides have been discussing the proposal for
several weeks. However, the chances of a merger actually happening
are only slightly better than 50%, according to The Wall Street
Journal.
Alcatel has only been willing to confirm that it has put in a
formal bid for Lucent's fibre-optic business.
Officials at Alcatel were not available for comment.