Stockholders Approve Alcatel-Lucent Union

The approval was expected despite concerns that Alcatel is paying too much for Lucent, which may be one reason stocks of both firms have fallen more than 20% in recent months. About 90,000 employees are expected to lose their jobs in the merger.
Stockholders of Alcatel SA and Lucent Technologies approved their merger Thursday, as expected.

Lucent's Chairman and CEO Patricia Russo, who will run the new combined operation, said the merger is "an excellent match of solutions, geography and people," according to press reports.

The deal was approved even as the stocks of both firms fell more than 20 percent in recent months and investment banking analysts complained that Alcatel was paying too much for Lucent. France-based Alcatel will be the dominant company in the combine with a stock ownership of about 60 percent.

Some 9,000 employees are expected to lose their jobs in coming weeks as the new company moves to eliminate duplicating jobs and facilities. The companies previously said they expected to save $1.7 billion by merging.

"As we have said from the start," Russo said in a statement, "the primary driver of this combination is to create long-term value for shareowners, customers, and employees."

The combined organization is expected to have annual sales of about $25 billion representing an 18 percent share of the worldwide telecommunications market.

Each corporation has a long history in telecommunications. In its former incarnation as Western Electric, Lucent represented the lion's share of AT&T's manufacturing capability before Ma Bell was broken up more than two decades ago. Major sections of Alcatel were cobbled together from ITT to help create Alcatel.

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