Bloomberg News

Alcatel-Lucent Gets $1.5 Billion Genesys Bid From Permira

October 19, 2011

(Updates with labor unions in second paragraph.)

Oct. 19 (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’s shares had fallen by 4.3 percent to 2.03 euros in Paris trading as of 12:26 p.m., valuing the company at about 4.7 billion euros. The company missed sales estimates in the second quarter of this year, 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.

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.

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., 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.

--Editors: Chris V. Nicholson, Julie Alnwick

To contact the reporter on this story: Matthew Campbell in Paris at

To contact the editor responsible for this story: Kenneth Wong in Berlin at

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