French vendor Alcatel-Lucent has entered into exclusive discussions with China Huaxin after receiving a binding offer from the technology investment company for its enterprise unit.
Announcing its full-year 2013 results today, Alcatel also revealed the…
French vendor Alcatel-Lucent has entered into exclusive discussions with China Huaxin after receiving a binding offer from the technology investment company for its enterprise unit.
Announcing its full-year 2013 results today, Alcatel also revealed the deal talks and said the contemplated transaction values the whole of Alcatel-Lucent Enterprise at €268m (US$361.7m), including €31m (US$41.8m) worth of debt.
The vendor said it will retain a 15% stake in the unit.
A definitive acquisition agreement is expected in Q2 2014 while closing of the transaction, which requires regulatory approval, is scheduled to take place in the third quarter.
Lazard has reportedly been advising Alcatel on the sale.
The development comes a few weeks after the sale of Alcatel’s US subsidiary LGS Innovations to Madison Dearborn Partners, CoVant and a number of undisclosed investors for up to US$200m.
These deals are part of Alcatel’s turnaround strategy announced in June last year and aimed at raising €1bn from asset sales by the end of 2015. It also plans to slash its fixed costs by €1bn, which includes cutting jobs, and is looking to tackle its debt.
Since November, it sold US$2.15bn in bonds, secured a €504m loan and raised US$1.3bn through a stock issue.
In 2013, the company said it achieved fixed-cost savings of €363m. Its full-year revenue was €14.44bn, a 2.9% increase on a constant-currency basis compared with 2012. In Q4 however, revenue was down 0.1% on the Q4 2012 result. Its operating income stood at €290m last year against a €263m loss in 2012.
Alcatel has been facing intense competition from European and Chinese rivals. CEO Michel Combes previously said he wants to reposition the loss-making company from a telecoms equipment generalist to “an industrial specialist in IP networking and ultra-broadband access”.
Since the recovery programme was announced last summer, Alcatel’s shares have gone up about 100%.
