Alcatel And Lucent To Officially Merge Nov. 30 - InformationWeek

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Software // Enterprise Applications

Alcatel And Lucent To Officially Merge Nov. 30

The merger was approved by President Bush and the Committee on Foreign Investment in the United States, and the House Armed Services Committee reviewed its national security implications.

Alcatel and Lucent Technologies said they will complete their merger on Nov. 30, in the wake of approval of the merger by President Bush and the Committee on Foreign Investment in the United States.

The merger, with France's Alcatel to emerge as the dominant partner, passed an important hurdle early last week when the House Armed Services Committee reviewed national security implications of the merger in a closed session.

A chief stumbling block had been the status of Lucent's Bell Labs, which has produced Nobel Prize winners and a slew of important inventions including the transistor and Unix. Although the committee didn't spell out in detail any terms agreed to by Alcatel and Lucent, the firms said they had agreed to adhere to certain restrictions.

In a statement late Friday, Alcatel and Lucent said: "CFIUS prepared a recommendation on the merger transaction to the President of the United States in the final phase of the approval process and the president has accepted the CFIUS recommendation that he not suspend or prohibit the proposed merger transaction, provided that, in time periods specified, the companies execute a National Security Agreement and Special Security Agreement to which they have agreed with U.S. government agencies."

While much of the negotiations between the two companies and the government was conduced in secret, Patricia Russo, Lucent's chief executive, said in written testimony delivered to lawmakers: "As a result of our interactions with CFIUS, we have developed an agreement that will address the national security interests the government had identified."

Previously, Lucent had agreed to create a special unit to operate sensitive work and contracts with national security overtones. The agreement calls for the unit to be operated by U.S. citizens.

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