Alcatel-Lucent bosses confirmed they will press ahead with a planned €15.6 billion ($17.5 billion) merger with Nokia despite shareholder concerns about the transaction.
The French-U.S. infrastructure company's board of directors gave their full backing to the proposed deal after clearing a key hurdle in France, where the deal was this week ratified by the company's French Group Committee (Comité de Groupe France). French regulations required the committee to approve the Nokia deal before Alcatel-Lucent's board could move forward.
Alcatel-Lucent will include the committee's view of the deal in an offer response document that it must file with the Autorité des Marchés Financiers, France's financial markets authority.
Philippe Camus, chairman of the board of directors of Alcatel-Lucent, welcomed the French Group Committee's clearance of the deal. "The board is very pleased to see that the consultation of Alcatel-Lucent's French Group Committee on the proposed combination with Nokia has been completed in line with the contemplated timing and encourages both teams to continue working towards the creation of a European champion and global leader in ultra-broadband, IP networking and cloud applications".
While Alcatel-Lucent noted that the proposed deal has yet to be approved by Nokia's shareholders and regulators, the backing of the French Group Committee is a major boost for the planned integration after doubt was cast on its future by the French-U.S. company's shareholders.
At a meeting in late May, Alcatel-Lucent shareholders questioned the board's desire for a deal with Nokia, with one noting that the Finnish company has not been a stalwart performer in recent years, and another stating that the price on the table was not high enough, the Wall Street Journal reported.
Management hit back, stating that the deal is necessary to ensure Alcatel-Lucent's survival. Nokia would bring access to a wireless infrastructure market in which Alcatel-Lucent currently lacks a meaningful presence, they argued. The Journal cited Camus as stating that the company had lost ground in the wireless market after its 2006 merger with Lucent Technologies was mishandled.
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