French telecommunications equipment maker Alcatel and Lucent confirmed Tuesday that they have been negotiating a merger that would have been valued around US$32 billion. The discussions, however, "have not resulted in any agreements and have been terminated," according to a statement released by Lucent. The companies declined further comment.
A source close to Lucent said the deal, which was in the works for the last few months, fell through because Lucent wanted a merger of equals, while Alcatel wanted the deal constructed as an acquisition of Lucent.
"We were looking at the value of getting both companies together to accelerate our turnaround plan," the source said. "But in the last few days, it became clear this was not going to be a merger of equals. It was in the best interest of our shareholders, our customers and employees to pursue our own path."
Another issue, the source said, was that Alcatel offered to buy Lucent with an at-market deal, meaning they wouldn't offer Lucent shareholders anything beyond the company's current stock price.
"We walked away from an at-market deal. There was no premium for investors," the source said. "If you're talking about a no-premium deal, you want to see a merger of equals."
Lucent will continue to run as a standalone company, although merger talks with Alcatel and other companies could resurface in the future.
"The talks are now terminated, but who knows what could happen? This doesn't shut the door," the source said.
