Alcatel, Lucent shares rise on merger plan

Shares in Alcatel SA and Lucent Technologies posted gains as investors welcomed the French telecom equipment maker's acquisition of its US rival in a $13.4 billion stock swap, an Associated Press report said.

Alcatel's American depositary shares rose $0.81, or 5.3%, to close at $16.21 on the New York Stock Exchange, while shares in Lucent increased $0.03, or 1%, to finish at $3.08 on the NYSE, the report said.

The two companies offered few additional details on their deal, which included plans to cut 8,800 jobs, or 10% of the combined global head count, the report said.

Lucent CEO Patricia Russo, who will head the new company, and Alcatel chairman and CEO Serge Tchuruk, who stays on as non-executive chairman, declined to say where or when the cuts would be made.

The report said analysts praised the logic of the deal, which will create a new trans-Atlantic powerhouse in a consolidating telecommunications industry. It will have annual sales of $25 billion and an 18 % share of the global market for telecoms gear.