Report: Lucent, Alcatel discuss complete merger

French telecommunication equipment maker Alcatel SA said Friday that it has made a bid to buy Lucent Technologies Inc.’s fibre-optic business, but according to a report published Friday in The Wall Street Journal newspaper, those talks have broadened to include the possibility of a full merger between the two companies.

“Yes, we have put in a formal bid for the fiber-optic business of Lucent but I cannot give you details. In terms of buying Lucent, on that we do not comment,” said an Alcatel spokeswoman who asked not to be named.

Officials at Lucent could not immediately be reached for comment.

Last month, Lucent announced that it was considering the possibility of selling its optical fiber solutions unit as part of its effort to focus more on systems software and services for communications infrastructure, and to infuse itself with some badly needed cash. Lucent has been denying rumors that it is on the brink of filing for bankruptcy. The company has suffered many setbacks, including financial troubles, layoffs and an accounting investigation by the U.S. Securities and Exchange Commission.

Earlier this week, Lucent announced second-quarter earnings that missed analysts expectations by about US$0.14 a share, and admitted to problems with a financial deal involving wireless broadband company Winstar Communications Inc. as well as the value of certain equity investments.

Alcatel is among several potential buyers, including Corning Inc., JDS Uniphase Corp. and Pirelli SpA, that have informally expressed an interest in acquiring Lucent’s optical-fibre business. Based in Norcross, Georgia, Lucent’s optical unit employs 6,000 people and is second only to Corning in the production of fibre-optic cable. It could fetch between US$4 billion and $8 billion for the troubled telecommunication equipment provider.

Lucent is expected to announce the winning bid next month.

According to the WSJ, talks between Alcatel and Lucent have discreetly moved towards exploring the possibility of a full merger “between two equals.” But the report quotes those close to the talks as holding little hope that such a deal could be pulled off, primarily due to Lucent’s recent woes and what is perceived as a lack of direction for bringing itself back into the black.

Lucent Technologies, based in Murray Hill, N.J., can be reached at Alcatel, in Paris, can be contacted at