Alcatel in Lucent unit bid

April 26, 2001
Web posted at: 1106 GMT

LONDON (CNN) -- France's Alcatel said it made a bid for Lucent Technologies' fibre optics business, which analysts have valued at up to $8 billion.

Alcatel Chairman Serge Tchuruk told a news conference on Thursday that other parties are also interested in the business, accorindg to Reuters. "We have made an initial offer, we will now see how things develop."

"Lucent has decided to sell its fibre optics division," Tchuruk said. "It's a very large division. It's clear that it's a major restructuring event for all players in this business."

Last year Alcatel, Europe's fourth-biggest telecoms equipment company, listed its Alcatel Optronics business on the stock market, giving it currency to pursue acquisitions.

Alcatel declared its interest in Lucent's (LU: Research, Estimates) unit at a press conference as it announced plans to stop making mobile phones after losses dragged down its first-quarter results.

The multinational said manufacturing would be folded into one plant in France and the work there would be outsourced to Flextronics, a contract electronics manufacturer.

In January, Ericsson (ERICY: Research, Estimates) said it was outsourcing its mobile phone production to Flextronics to cut costs. The Singapore-based company also has a major contract with Motorola Inc. (MOT: Research, Estimates).

Alcatel reported that both revenues and the number of mobile handsets sold were down 50 percent compared to a year ago as 2.4 million units were sold.

A sudden slowdown in demand had been exacerbated by excess inventories, it said, contributing to a loss of 159 million ($143 million) compared to a profit of 27 million in the same quarter last year.

Overall, Alcatel sales were up 21 percent on the same period in 2000 but net profits declined 19 percent to 210 million.

Its best-performing divisions were carrier networking and optics, where sales grew more than 40 percent year-on-year, the company said.

Alcatel shares (PCGE) were up 2.2 percent at 32.98 by midday in Paris with the results meeting analysts' expectations.

Alcatel cuts 1,100 jobs – Apr. 2, 2001

Alcatel profit rises 26 percent – Jan. 31, 2001

Alcatel

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