Alcatel Lucent Essay

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CASE STUDY The Alcatel-Lucent Merger – What went wrong? It did not take long after the merger for things to start going wrong for Alcatel-Lucent CEO Patricia Russo, who opted to leave the vendor last month after admitting she could no longer work with fellow board resignee chairman Serge Tchuruk. MICROSCOPE, August 11-17, 2008 (Scroxton, 2008) It seems that this deal was not meant to happen. The original merger negotiations between Alcatel of France, the communications equipment maker based in Paris, and Lucent Technologies, the U.S. telecommunications giant, took place in 2001. However, the finely detailed deal collapsed on May 29, 2001, after the two companies could not agree on how much control the French company would have. Lucent’s executives apparently wanted the deal as a “merger of equals”, rather than a takeover by Alcatel. (Sorkin, Romero, Shiesel, 2001) The failed deal was regarded as a severe blow to Lucent’s image. Industry watchers questioned how Lucent would be able to survive this most recent blow. Although it was not clear which company initiated the negotiations, it was reported that Lucent ended them after much of the senior management detected that the proposed deal would not be a merger of equals. (LaBarba, 2001) In 2006, however, renewed negotiations took place, resulting in the transatlantic relationship being consummated. Shareholders in France approved the merger of the telecommunications equipment makers Alcatel and Lucent on September 7, 2006. However, Alcatel investors still had concerns about the leadership and financial health of their new American partner. Alcatel’s chief executive, Serge Tchuruk, tried to reassure the 1,500 shareholders gathered in Paris to back the merger, saying the company – to be called Alcatel-Lucent – is “truly global and has no equivalent today and won’t in the future.” (Kanter, 2006) Mr.
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