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Mergers, Acquisitions and Takeovers Case Study

Case Title:

Lucent Technologies-Alcatel Merger : The Potential Synergies

Publication Year : 2006

Authors: Rajendar Singh, Sumit Kumar Chaudhuri

Industry: Engineering, Electrical and Electronics

Region:US France

Case Code: MAA0053

Teaching Note: Not Available

Structured Assignment: Not Available

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On April 2nd 2006, Alcatel, the French telecom equipment major and Lucent Technologies from the US announced a mega merger worth $13.4 billion. The merger would form the biggest telecom equipment company in the world surpassing the market leader, Cisco and offer a complete portfolio in the telecom equipment industry, from equipments to service solutions for the networks. However, analysts are skeptical about the synergistic benefits due to concerns about cultural integration and product overlaps.

Pedagogical Objectives:

  • To understand the new trends in the global telecom industry after the telecom bubble burst in 2000
  • To analyse the factors that prompted the merger, the potential synergies and pitfalls the merger might witness
  • To discuss the effect of this mega merger on the global telecom industry and the possible consolidations that it might trigger among telecom equipment manufacturers and service providers.

Keywords : Mergers,Acquisitions,Alliances Case Study;Cisco; Telecom bubble; Telecom industry; ZTE; Huwaei; Patricia Russo; Serge Tchuruk; Failed merger; Merger of equals; Bell Labs; IPTV; CDMA; DSL; Optical fiber; Consolidation

Contents : 
A Competitive Landscape of the Global Telecom Equipment Sector
Share Price Indices of Selected Telecommunications Operators
Layoffs in the Telecom Industry
Alcatel’s Acquisition of Lucent Technologies: The Pay Offs
Snapshot of Both the Companies
Geographical Reach of the Merged Entity
Trendsetter for other Telecom Equipment Firms?

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