Alcatel-Lucent lined up its cyber security division as the next business unit to be offloaded as part of a sweeping restructuring programme introduced by CEO Michel Combes in 2013.
Michel Combes, CEO of Alcatel-Lucent
The infrastructure vendor has entered exclusive negotiations with Thales regarding the sale of its cyber security services and communications security division, in a deal that would form part of a partnership covering end-to-end network security services.
Alcatel-Lucent said the agreement will enable it to expand its commercial position in cyber security, which is one of the goals of the Shift Plan restructuring programme. The infrastructure company plans to offer customers end-to-end security products, combining its network protection expertise with complementary Thales services.
Combes said the partnership with Thales assists his company in its goal of repositioning as a "specialist in IP networks, cloud technologies, and secured ultra broadband access." The chief executive added that cyber security "is of strategic concern to our customers, and to networks in general."
Jean-Bernard Lévy, Chairman and CEO of Thales, said the proposed acquisition would strengthen his company's position in cyber security and consolidate "its position as European leader in this strategic sector."
Alcatel-Lucent's cyber security teams at three sites in France, and facilities in Germany, Belgium, and the UK, would be affected by the Thales deal.
The proposed sale of the cyber security business follows a deal to sell Alcatel-Lucent Enterprise to China Huaxin, and the closing of the sale of LGS late March. Alcatel-Lucent is divesting its assets as part of Combes' Shift Plan, which aims to return the company to profitability by shedding €1 billion from costs, and disposing of €1 billion worth of assets by 2015.
Alcatel-Lucent's first quarter 2014 earnings suggest the plan is bearing fruit. The company slashed its net loss from €353 million ($482 million) in the first quarter of 2013, to €73 million in the recent quarter, despite component shortages that affected most infrastructure companies during the period.
In early May, Combes denied a merger of Alcatel-Lucent with Nokia's Networks business is in the pipeline, noting that his primary objective is to deliver on the goals of the Shift Plan.
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