Alcatel To Acquire Newbridge For $7 Billion - InformationWeek

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Alcatel To Acquire Newbridge For $7 Billion

Targeting the lucrative telecom carrier equipment market, Alcatel SA today revealed plans to acquire Newbridge Networks, a maker of switches for the service provider market. With the $7.1 billion deal, Alcatel is hoping to better compete with Nortel Networks, Lucent Technologies, and Cisco Systems.

The companies say the acquisition will allow Alcatel to provide advanced, end-to-end broadband IP networks comprising Alcatel's widely used asymmetric digital subscriber line and wireless access gear with carrier switches from Newbridge to all types of service providers. Newbridge is best known for its wide area network access switches and asynchronous transfer mode carrier systems.

"Alcatel is making a major move to become a worldwide leader in new generation networks, which will handle the explosive growth of data with the appropriate quality of service," Alcatel CEO Serge Tchuruk says.

"This makes sense as the widening deployment of broadband access options such as DSL is driving the amount of data carried over service provider networks skyward," says Daniel Briere, president of TeleChoice, a telecommunications consulting firm. "To keep pace, the providers need teams like this to provide them the infrastructure they need to migrate to bigger bandwidth networks with advanced capabilities."

Like the big three, Alcatel seeks to help service providers migrate from networks based on older technologies to so-called next-generation networks based on the Internet Protocol.

Newbridge will merge with Alcatel's Carrier Data Division to form the new Carrier Internetworking Division, which will be based at Newbridge's headquarters in Kanata, Ontario, and is expected to have combined annual sales of more than $2.5 billion. The deal has been approved by each company's board of directors but still requires approvals from shareholders and regulators.

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