Alcatel, Lucent to merge, layoffs loom

France's Alcatel will acquire rival Lucent Technologies in a $13.4-billion stock swap that will form an industry powerhouse with a product line broad enough to entice customers in a consolidating telecom industry, an Associated Press report said.

The companies also said they planned to shed 10% of the combined work force, or about 8,800 jobs, after the deal closes.

The combined business, to be based in Paris, would work to capitalize on fast growing converged offerings such as "triple-play" Internet, phone and TV packages that had become popular in the telecom field, the report said.

The new company would have annual sales of $25 billion and would generate annualized pre-tax savings of $1.7 billion within three years, the companies said, according to the report.

Just over half the savings would come from job eliminations, with the rest by consolidating purchasing, research and development and support services such as sales and marketing, the report said.

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