U.S. government approves merger of Lucent and Alcatel

U.S. government regulators have approved the planned merger of telecommunications giants Lucent and Alcatel.

The deal would not violate American antitrust laws, according to filings on Wednesday from the U.S. Department of Justice and the U.S. Federal Trade Commission.

That means the deal is still on track to gain full acceptance by April 2007, an estimated six to 12 months from the original announcement, said Lucent spokeswoman Joan Campion.

Together, the merged companies hope to offer the broadest telephony portfolio in the industry, allowing it to beat its competitors in the race to provide next-generation wireless, wireline and converged networks, Lucent said.

The companies announced in April that Alcatel in Paris would pay $14 billion to acquire Lucent, of Murray Hill, N.J.

Before it earns final approval, the deal must survive a vote by Lucent shareholders at a special meeting on Sept. 7. Alcatel shareholders will vote in Paris the same day.

Finally, the deal needs approval by the Committee on Foreign Investment in the United States and the European Union, Campion said.

If it goes through, the companies must agree on a new name, and move the corporate headquarters to Paris.

Some things will not change; Lucent will continue its U.S. business operations, although it will be a wholly owned subsidiary of Alcatel. And Lucent's current CEO, Patricia F. Russo, will retain her title in the new company.

Alcatel sells telecom equipment for voice and data transmission to customers in 130 countries, including fixed line and wireless telecommunications operators, ISPs, governments and businesses.

Lucent designs systems for next-generation communications, including mobility, optical, software, data and voice networking. Its customers include communications service providers, governments and enterprises.

The merged companies would produce annual savings of $1.7 billion, and become a leader in the fast-growing communications networks industry, with leading positions in 3G wireless, broadband access and optical networks, according to a Lucent U.S. Securities and Exchange Commission filing.

The IDG News Service is a Network World affiliate.