NEWS | Wednesday, 30 July 2008

Alcatel-Lucent bosses call it quits

After the Franco-American merger Alcatel-Lucent reported a net loss of €1.1 billion ($1.73 billion) for the second quarter, compared with a net loss of €586 million a year earlier, both its Chairman and its CEO yesterday announced their resignations effective as of later on this year.
Alcatel-Lucent remains the world’s largest fixed and mobile telecom gear maker.
After the announcement of the departures of Chairman Serge Tchuruk and Chief Executive Patricia Russo Alcatel-Lucent shares jumped as much as 6 percent in morning trade in Paris as investors applauded the move. The stock is still down almost 20 percent since the start of the year and 60 percent since the merger was completed.
In a $11.4 billion deal, Alcatel had acquired Lucent Technologies Inc. in 2006, and is now in the middle of a restructuring process due to cut down the merger’s workforce by 16,500.
Tchuruk, Alcatel’s longtime chairman and CEO before the combination saw him take on the non-executive chairman role, said in the statement that the resignations were aimed at giving Alcatel-Lucent “a personality of its own, independent from its two predecessors.”
On her part, Russo said that although she was “pleased” with the company’s progress, “the company will benefit from new leadership ... to bring a fresh and independent perspective.”
When conceived, the Alcatel-Lucent tie-up was designed to boost margins through cost and research and development savings, while improving the joint company’s pricing power with telecom operators, its largest customers.
The combination was seen as creating the critical mass to compete with the likes of China’s Huawei Technologies Co. and Ericsson AB of Sweden.