Alcatel buying Lucent for $13.5 billion

The French telecom company Alcatel is buying Lucent in what is reported to be a $13.5 billion acquisition made to improve R&D capabilities in both organizations.

Lucent’s CEO, Patricia Russo, doesn’t speak French but will become the new CEO of the Paris-based giant. I wonder how well that’s going to work out. It will be difficult for her to communicate her executive vision to the troops if she can’t speak their language.

Some details:

  • Alcatel will own 60% of the common stock of the combined company.
  • Both companies will have equal representation on the board of directors, with two additional independent directors.
  • Revenues will be approximately $25 billion.

Lucent has some sensitive US government work that will be overseen by an independent subsidiary with three US citizens on its board of directors. The deal still has the potential to become a “political football” much like the Dubai Ports World deal that fell through and when Lenovo bought part of IBM.