Report: Alcatel-Lucent in talks on sale of enterprise unit

The Alcatel-Lucent rumour mill continues to grind as 2014 gets underway, with a new report saying the equipment manufacturer is in talks with potential buyers on the sale of its enterprise unit.

According to Bloomberg, the buyers include Unify GmbH & Co. GK, which is owned by Gores Group and Siemens, as well as two other groups including a Chinese investor. The unit sells services and equipment to companies and reported revenue €764 million ($1 billion) in 2012.

Citing unidentified sources, Bloomberg said a decision on the sale could be made by March, with the unit possibly valued at as much as €250 million.

Simon Poulter, a spokesman for Alcatel-Lucent, said the company was not giving any comments on the report. Bloomberg also said spokespeople from Unify, Siemens and Gores Group declined to comment.

Alcatel-Lucent has been working on turning around its fortunes for several years with the latest restructuring plan, called the Shift Plan, unveiled by CEO Michel Combes in June.

Combes outlined further cost-cutting measures in a drive to become cash-flow positive by 2015, and also touted a new slimmed-down organisational structure that will see the company focus on three main segments to become a specialist in IP networking and ultra high-speed broadband.

The group plans to focus on high-growth areas such as LTE and high-speed broadband, and to lower fixed costs by more than 15 per cent, saving a total of €1 billion ($1.37 billion). It also plans to generate a further €1 billion from asset disposals by 2015.

Indeed, the company announced only in December that it has agreed to sell LGS Innovations LLC to a US-based company owned by a Madison Dearborn Partners-led investor group for US$200 million.

In October, the company also confirmed it would cut a further 10,000 jobs worldwide by 2015 as part of the Shift Plan, sparking massive protests in France. On Friday France's industry minister Arnaud Montebourg again appealed to Combes to make a larger effort to preserve more jobs in France.

Bloomberg noted that the enterprise unit has around 2,800 employees, including 1,400 based in France.

For more:
- see this Bloomberg article
- see this Reuters article

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