Trans-Atlantic telecom equipment rivals Lucent Technologies and Alcatel could agree on a merger worth around US$32 billion as early as Tuesday, providing talks progressed over the weekend.
"If the talks succeed, and it's a big 'if', it could be announced on Tuesday," one industry source told Reuters.
"From the sense that I have, it's not like we're at the point where we're just working through the semantics. I still think there's a lot of discussion taking place," a source familiar with the talks said.
Both companies have declined comment on what they describe as "rumors."
France's Alcatel is considering acquiring US-based Lucent, which has reported a combined US$4.7 billion in losses in the first half of its current fiscal year, for little or no premium for Lucent shareholders, sources close to situation said.
Sources close to both companies have painted the prospective deal as a "merger between equals," but it is more likely Alcatel would emerge as the dominant partner in any pairing, analysts and portfolio managers said. They said Alcatel Chief Executive Serge Tchuruk would need to tread carefully or risk chasing off some of Lucent's top executives.
Alcatel also would have to see the talks through Washington regulators, who would scrutinize any deal for anti-trust issues and for research being carried out in Lucent's Bell Labs, which could be vital to US national security.
The deal would create a telecom equipment giant with a strong presence in both North America and Europe, and could set off similar mergers elsewhere in the telecom equipment industry.
The talks are inspired by the aim to pool customers in different regions of the world, offering products and services through a shared global network. Currently, Alcatel has only a small presence in North America where it wants to expand.
If the talks fail, rival telecom equipment companies have already expressed interest in Lucent's business units. Italy's Pirelli said earlier this month that it was interested in the fibre optic cable unit.
