Alcatel-Lucent Gets $1.5 Billion Genesys Bid From Permira
Alcatel-Lucent SA Chief Executive Officer Ben Verwaayen
Emile Wamsteker/Bloomberg
Alcatel-Lucent SA Chief Executive Officer Ben Verwaayen.
Alcatel-Lucent SA Chief Executive Officer Ben Verwaayen. Photographer: Emile Wamsteker/Bloomberg
Alcatel-Lucent SA received a $1.5 billion binding offer for its Genesys call-center software unit from Permira Advisers LLP, capping a three-month review of its enterprise business.
France’s largest telecommunications equipment supplier expects to close a deal to sell Genesys late this year or in early 2012. Alcatel-Lucent said today it will retain the rest of its enterprise division after French labor unions said its sale could trigger domestic job losses.
Chief Executive Officer Ben Verwaayen is nearing the end of a three-year turnaround plan for Alcatel-Lucent, which has struggled to turn a profit since its creation through the 2006 merger of France’s Alcatel SA and Lucent Technologies of the U.S. Since he joined Alcatel-Lucent in 2008 from London-based BT Plc, Verwaayen has unloaded assets including its vacuum technology unit and a stake in aerospace supplier Thales SA, before beginning a review of options for its enterprise business in July.
Alcatel-Lucent fell 7.7 percent to 1.96 euros in Paris trading, valuing the company at about 4.6 billion euros. The company missed sales estimates in the second quarter, sending its shares down the most in almost three years. They have lost more than four-fifths of their value since the end of 2006.
Political Risks
Alcatel-Lucent said today that keeping and strengthening the enterprise business, which has significant facilities in France, “serves Alcatel-Lucent and our customers best,” and that it and Genesys, based in Daly City, California, will continue to co-operate.
Some potential bidders viewed an acquisition of the entire unit as politically risky in the run-up to the French presidential elections set for April 2012, a person familiar with the situation said last week.
In July the CFDT, CFE-CGC, and CGT trade-union federations demanded assurances from Industry Minister Eric Besson that jobs and benefits would be preserved in the event of a sale.
In its networking business, Alcatel-Lucent is contending with increasing competition from China’s Huawei Technologies Co. and ZTE Corp. (763), along with traditional rivals including Ericsson AB. At the same time, consolidation among mobile network operators, like the 2009 merger of Deutsche Telekom AG and France Telecom’s U.K. units, may reduce network spending growth by eliminating duplication even as data consumption surges with the spread of devices such as Apple Inc.’s iPhone.
Qatalyst Partners is advising Alcatel-Lucent on the deal, and Goldman Sachs Group Inc. is working with Permira.
To contact the reporter on this story: Matthew Campbell in Paris at mcampbell39@bloomberg.net.
To contact the editor responsible for this story: Kenneth Wong in Berlin at kwong11@bloomberg.net
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