Alcatel-Lucent merger seen getting shareholders' nod

Alcatel's purchase of US rival Lucent Technologies looks set to clear its highest remaining hurdle when shareholders on both sides of the Atlantic vote on whether to go ahead with the $11-billion deal to create a new global force in telecom equipment, an Associated Press report said.


According to the report, both companies were likely to win their shareholders' blessing, analysts predicted, with Alcatel investors swallowing their misgivings about the price of the all-stock deal - because the alternatives were worse.


"For Alcatel shareholders, there's more to lose than to gain by refusing the merger," said Odon de Laporte of CA Cheuvreux.


The brokerage expected Alcatel to muster the required two-thirds majority of votes by a comfortable margin despite terms now seen as "a little generous to Lucent holders" in light of weaker earnings and guidance posted by the US company since the deal was announced.


Investors broadly appreciated the logic of the deal, which would create a stronger player in the fast-consolidating telecom industry, the report said.


With annual sales of about $25 billion and an 18% share of the global market for telecom gear - the backbone of mobile phone, fixed-line and Internet-based services - Alcatel-Lucent would negotiate better prices with suppliers and customers than either company could win alone, the deal's supporters said, according to the report.