Lucent, Alcatel call the whole thing off

Alcatel SA and Lucent Technologies Inc. announced on Tuesday they have ended talks over the possible merger of the two companies.

Talks between the French telecom company and the American communication equipment vendor resulted in no agreements and talks have been terminated, Lucent and Alcatel said in a brief statement issued after the U.S. financial markets closed Tuesday. The companies said they would have no further comment on the merger talks.

Lucent spokeswoman Mary Lou Ambrus said the company had no comment and referred back to the prepared statement.

It’s unclear what caused the talks to fizzle out, but published reports Tuesday suggested that Lucent was looking for a marriage of equals with Alcatel on the combined company’s board of directors, according to unnamed sources cited in the online edition of The Wall Street Journal.

Alcatel made no secret that it was looking for a beachhead into the U.S. telecom market, bolstering its marketing and advertising to build name recognition in North America. Analysts had suggested the deal was worth at least $32 billion, according to a report in Tuesday’s Financial Times.

By contrast, Lucent saw the chance to merge with a strong partner after a tumultuous year in which it had changed its chief executive officer, dealt with a major restructuring and posted a series of negative financial reports.

Analysts suggested a blatant drawback of the deal was that the two companies sold virtually the same telecommunication equipment products.

“Alcatel walks away from this without any scars,” said Jeff Kagan, an independent telecommunication industry analyst in Atlanta. “Lucent is (scarred). Alcatel wanted a quick way into the U.S. market. Lucent executives showed (the company) needs a fix and it is going to take a longer time to turn the company around; not that Lucent is going to go away, but it is going to take time to fix.”

Alcatel, in Paris, can be contacted at http://www.alcatel.com/. Lucent Technologies, based in Murray Hill, N.J., can be reached at http://www.lucent.com/.