Serge Tchuruk, the CEO and president of Paris-based telecommunications and network equipment maker Alcatel SA, fairly bursted with excitement about his company's planned acquisition of Canadian network equipment maker Newbridge Networks on Wednesday.
"This is not just another acquisition," Tchuruk says of the deal, valued at $7.1 billion. "This is a strategic move in our clear objective to position Alcatel among the top three players worldwide in the next generation of networks."
Analysts today also give the proposed acquisition a thumbs up and say, if successful, the purchase should help Alcatel compete against network giants Cisco, Lucent and Nortel Networks.
Tchuruk says Alcatel will use Newbridge's ATM switches to enhance its distributed subscriber line (DSL) technology. His company is a leading vendor of DSL technology in North America, he adds.
The acquisition may help Alcatel compete more successfully against its rivals in the network equipment market. "They needed something that would flesh out their product line, and this [purchase] gives them more WAN switching capacity," says Kathie Hackler, an analyst with industry research firm Dataquest in San Jose.
Should Alcatel's planned purchase of Newbridge go ahead, it could cast doubt upon existing agreements between the Canadian company and its partners; for example, the current relationship between Newbridge and Siemens AG in which the pair sold network equipment together.
"We are moving forward with the same relationship we had before with Siemens," says Sarah Miller, a Newbridge spokeswoman.
However, the long-term relationship seems cloudy. "There is a big question about what's going to happen with Newbridge and Siemens," Dataquest's Hackler says.
Alcatel, in Paris, can be found online at www.alcatel.com/. Newbridge Networks, in Kanata, Canada, can be found online at www.newbridge.com/.
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