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Alcatel, Lucent Finalize $25 Billion Merger |
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Monday, 03 April 2006 |
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PARIS (Reuters) - Telecoms equipment companies Alcatel and Lucent Technologies (LU) said on Sunday they had entered a definitive agreemen to merge and form a new group with revenues of around 21 billion euros ($25.4 billion). The transaction, which will see Alcatel shareholders have the lion's share of the new company, stands to create a world leader in its sector and comes amid a wave of consolidation in the telecoms industry.
Lucent-Alcatel Merger Concerns Groups
By LINDA A. JOHNSON
AP Business Writer
TRENTON, N.J. (AP) -- If the current talks between telecommunications gear makers Lucent Technologies Inc. and Alcatel SA result in a merger, organizations representing nearly a quarter-million union workers and retirees want to ensure their security.
A top concern is safeguarding $34 billion in pension funds for 235,000 retired managers, unionized workers and their spouses, Ken Raschke, president of the Lucent Retirees Organization, said Friday. He also wants to make sure health care benefits are preserved.
"We will pull out every stop we know" if Lucent's commitments to retirees are not honored, he said, promising to "be all over Congress ... to have pending legislation protect the pensions of retirees of companies acquired by foreign companies."
Congress has been debating a major overhaul of pension rules for months.
Meanwhile, the Communications Workers of America already has requested a meeting with Lucent executives to see how a merger or an acquisition by Alcatel would affect about 3,150 unionized U.S. workers and many more retirees represented by the union, Ralph Maly, CWA's vice president for communications and technology, told The Associated Press.
"If the deal is beneficial to our members and retirees, we'll support it. If not, we'll do what we have to" to block it, said Maly, adding he hopes for a meeting soon with Lucent officials.
Although the companies are characterizing any deal as a "merger of equals," Paris-based Alcatel has a larger market value than Murray Hill-based Lucent.
Maly's union handles bargaining for workers from equipment installers and manufacturing workers to skilled tradespeople who make prototypes of new telecom gear.
The union's contract also covers pension and health care benefits for 75,000 retired union workers and about 47,000 spouses, or just over half the people represented by the retirees organization.
Maly said a combined company could choose to keep all the unionized workers and their contracts in place, or discharge the unionized employees, who would then be due severance pay. The new company also could decide to negotiate new contracts with Maly's union and the International Brotherhood of Electrical Workers, which represents about 350 other Lucent workers.
Maly said the key will be how much control the executives of each company have in the combination.
He said Lucent chief executive Patricia Russo has a fairly good relationship with the unions, while Alcatel has blocked efforts to unionize some of its employees in the United States and also outsources some of its work in this country.
"They fight unions to stay union-free," Maly said.
Lucent spokesman John Skalko declined to comment.
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