Lack of synergies important financial weight

Alcatel and Lucent in talks for a merger. The scenario is not unprecedented. In May 2001, the French and the American, then number one and five in the world of telecommunications equipment, had already taken language for a reconciliation. At this time, what was to become the merger of the year is a largely defensive operation. Since the bursting of the bubble a year earlier, the sector is in crisis, operators drastically reducing their investments when they are not bankruptcy. The initiative of the American, Alcatel and Lucent have included language to create a giant global $ 60 billion of turnover, perfectly positioned on the European and US markets. Serge Tchuruk, Alcatel President, this operation must be the consecration of the strategic repositioning of the Group on telecommunications. And the timing is good, since Lucent, born of a split in 1996 of the ATT operator, multiplies the woes: six times in 2000, he has revised its forecast of results down! Its President was dismissed late 2000 and replaced by one of his predecessors, Henry Schacht.

Several explanations

The group is in a tense financial situation and has just announced the removal of 16,000 positions. For many observers, Lucent played his last card: this will be either a merger with Alcatel or a butchering, or bankruptcy... But the stock market is not necessarily a good look at these engagement, and the Alcatel action is sanctioned. Lack of synergies, important financial weight... In a long-term perspective, marriage seduced, but its implementation is worried about.

It is at the castle of Mesnuls, near Rambouillet, the staffs of the two groups will negotiate, accompanied by their respective Councils: CSFB for the French, Morgan Stanley and SSB for the American. Discussions lasting several days. The two betrothed are in agreement on the essential: a merger "between equals" by stock exchange. But the devil, as in each case, lies in the details. The official reasons for this failure will never be given, but the press will move several explanations. Each camp said to be concern about the real state of the finances of the other. "Two companies can hardly merge when each of its side a deep crisis," remembers an observer. In addition, Lucent wanted a fair distribution of the seats on the Board of Directors and/or management, while Alcatel would like to have the majority, on the grounds that its shareholders will have 58 of the capital of the new entity. Finally, Henry Schacht, returning to the United States, have failed to convince its Board or its major shareholders to accept the concessions to the French. Including Serge Tchuruk is the boss (with Henry Schacht as Vice President) and the headquarters is in Paris.

There in the United States again, the hypothesis of a flagship of the U.S. industry pass under French control, and with it, the famous Bell Labs, pool of American research in high technology, working for the Pentagon, is also much reluctance, including elected representatives from New Jersey, headquarters of Lucent. The banns of marriage are ready to be published, launched invitations and small ordered... ovens, but the operation will be finally cancelled.