Alcatel, Siemens Said to Weigh IPOs for Enterprise Units

Alcatel-Lucent SA and Siemens AG (SIE) are weighing initial public offerings of their businesses that sell phone equipment and services to companies, according to people familiar with their plans.

Alcatel-Lucent is also considering a sale of the enterprise assets, which may fetch about 1.5 billion euros ($2.2 billion), one of the people said. Siemens Enterprise Communications, which has been folded into a venture with Los Angeles-based Gores Group LLC, is leaning toward an IPO, another person said. Both people declined to be identified because the discussions are private.

Products from the companies range widely from office phones to routers and conferencing gear. Phone-equipment providers are looking to shed slower-growing units to focus on more promising wireless technologies. Last year, Paris-based Alcatel-Lucent sold its vacuum technology unit for 200 million euros, after earlier divesting a stake in aerospace firm Thales SA. (HO)

Siemens, Europe’s largest engineering group, has got out of cordless-phone and wireless handset making and moved its network equipment business into a venture with Nokia Oyj. (NOK1V)

Peter Benedict, a spokesman for Alcatel-Lucent, and Alexander Becker, a spokesman for Munich-based Siemens, declined to comment.

Alcatel-Lucent fell as much as 2.4 percent to 4.26 euros and was down 1.7 percent as of 9:55 a.m. in Paris trading. Siemens declined as much as 0.5 percent to 97.78 euros and was down 0.3 percent in Frankfurt.

Alcatel-Lucent’s Options

The French company’s enterprise assets generated as much as 1.4 billion euros in annual revenue, and discussions on whether to move forward with a sale or an IPO haven’t been decided, one of the people said. Alcatel-Lucent, which doesn’t break out revenue from the business, had 16 billion euros in total sales in 2010.

Siemens Enterprise’s Amsterdam-based holding company reported 2.46 billion euros in sales and a net loss of 458 million euros for the year ended Sept. 30, 2009, the most recent period for which data is available. The business, run by former Deutsche Telekom AG executive Hamid Akhavan, sells technology used in call centers, messaging and teleconferencing.

Siemens’s Withdrawal

Siemens created the venture with Gores, which owns a 51 percent stake, in 2008 as part of a retreat from telecommunications activities.

“We have no intentions to indefinitely hold on to Enterprise Communications, we have made that clear,” Siemens Chief Financial Officer Joe Kaeser said in an interview with Bloomberg News in January.

At Alcatel-Lucent, Chief Executive Officer Ben Verwaayen has pledged to turn around years of losses that followed the 2006 merger of Alcatel SA and Lucent Technologies. The former BT Plc CEO has focused on wireless technologies such as so-called long-term evolution wireless networks to stay ahead of rivals including Nokia Siemens Networks and Huawei Technologies Co. of China.

Alcatel-Lucent is scheduled to announce first-quarter earnings May 6.

To contact the reporters on this story: Jacqueline Simmons in Paris at jackiem@bloomberg.net; Brett Foley in London at bfoley8@bloomberg.net; Matthew Campbell in Paris at mcampbell39@bloomberg.net.

To contact the editors responsible for this story: Jeffrey St.Onge at jstonge@bloomberg.net; Kenneth Wong at kwong11@bloomberg.net.

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