Alcatel-Lucent merger In 2001, it was the first time for Alcatel of France, the communications equipment maker based in Paris and Lucent Technologies, the U.S communications giant to come together with the aim of working together to create one of the biggest mergers…
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Lucent feared Alcatel’s takeover and thus the deal came to a halt on May 29, 2001. It is still not discovered that which company begin the negotiations but Lucent ended them on the basis that Alcatel was not agreeing on equals. Looking into the case, I believe may be the negotiations styles were not accurate for the scenario. According to Anatomy of a merger by James C. Freund, there are two ways of negotiating which let you go no where. One is doing what comes naturally to your mind, not thinking about the other party and doing and saying only what you want. Credibility and sincerity should be prominent in your negotiations and this style of doing what naturally comes to your mind is the worst style of negotiating. The second style is practice what I preach. You should not just read books for the sake of reading them. Practicing all negotiation styles in your merger is important. In 2006, the companies decided to merge again. Co operations begin to build up between the two companies. According to Paris and Murray Hill, N.J., April 2, 2006- Alacatel and Lucent Technologies announced that they are together as an ultimate merger now which is unbreakable. They are creating a genuinely global communications key provider for the entire world with the widest wire line, wireless and services collection in the market. The major reason of this merger is to increase revenues and profits based on market chances for the next-generation services, applications, and networks. The joint company’s scope, scale and global competencies will improve the long term value for customers, shareowners and employees. The contract, which was endorsed by the boards of directors of each company, will build upon the corresponding strengths of every company to generate a global market leader in the alteration of upcoming wireless, wire line and congregated networks. The shareholders in France accepted the merger in September 2006. The CEO of Alcatel invested 10.6 billion euro ($13.5 billion then) into the business at that time and remarked that Alcatel- Lucent “has no equivalent today or in future”. The combined sales of the company mounted to $25 billion in that year and it was believed that Alcatel-Lucent will be the biggest merger of communications in the world with its ongoing success. But mergers aren’t easy to handle! Conflict of interest, different cultural backgrounds and different attitudes towards work were the causes of divergence between the chief executives of both companies. Things start to take a pessimistic turn. Patricia F. Russo (chief executive of Lucent) also believed that things would start to work better for the both companies but they did not. Even though the regulatory hurdles were cleared in both U.S and European markets by the U.S State department and EU regulations but things didn’t take a positive turn. Both the CEO’s tried hard to cooperate with each other but was restricted by their French and American styles. According to an analyst, the corporate culture of Lucent’s clashed with Alcatel’s business model. In July 2008, Lucent’s CEO Patricia F. Russo resigned. She claimed that she could not get along with Serge Tchuruk, her fellow board member. He too resigned after some time. Both of the CEOs were not able to get along with each other. Even though the company official language was proposed to be English, Patricia spoke French as well to be conversant in the
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