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The French government was quick to dub the approximation of Alcatel-Lucent and Nokia, announced Tuesday, April 14 in the morning. Even present it as a good deal for Alcatel-Lucent and for Europe in general, which erases just the fact that the French group must be redeemed by his Finnish rival. Leaves, also, ask some safeguards, especially in employment.
“It’s a good deal for Alcatel-Lucent. Because it is a future operation, because we are building with this merger, the reconquest of Alcatel-Lucent was a company in very great difficulty there two years, “ said on Tuesday afternoon, the Minister of Economy, Emmanuel Macron. He was speaking after a meeting at the Elysee Palace between François Hollande and the leaders of both groups, the CEO of Nokia, Rajeev Suri, and the CEO of Alcatel-Lucent, Michel Combes.
“This merger will create a European champion and compete with Chinese groups” , has he continued, indicating that Nokia could make France the leading center for research & amp; development of the future group.
Mr. Macron also assured that “there will be no job losses in France” . “The number of jobs will be the same and even more. We had all the commitments on the part of Nokia “, he added. ” I will be extremely vigilant in preserving jobs on all French production sites. I refer in particular to Lannion sites (in Britain) and Villarceaux (Paris region). “
Concerned unions saw” redundancies “
As of this morning, fears were expressed at Alcatel-Lucent. “We hope that employment is preserved in France, had said Pascal Guihéneuf, CFDT, and we will take all the necessary contacts for this to be the” . The union said regret, moreover, that it is a French boss, who is about to give a national treasure to a Finnish group. Alcatel is still 8000 employees in France, spread throughout the country.
In the afternoon, the first three organizations of the group, the CFDT, CFE-CGC and CGT, issued a joint statement in which they stated that a redemption of Alcatel-Lucent by Nokia “can obviously we worry seen redundancies worldwide, activities, products and trade between the two companies with over 50,000 employees each. “
Taking ” act of the government’s commitment to be vigilant on the social and industrial consequences, notably on employment in France “, the unions asked to be received “over with” by Mr. Macron. European Committee long planned to be held Friday, April 17, plus a special France Group Committee in the afternoon.
Nokia refloated her infrastructure activity
The rumor of a merger between Nokia and Alcatel-Lucent fantasize bankers for almost two years. From informal, discussions between Michel Combes, head of Alcatel and Rajeev Suri, chairman of Nokia, will be intensified in recent months to reach more concrete proposals between Monday 13 and Tuesday, April 14.
“Nokia and Alcatel-Lucent confirmed it is in advanced discussions regarding a possible full merger, which would take the form of a Nokia public exchange offer on Alcatel-Lucent” , said the two groups in a statement Tuesday morning.
Since the resale of his division “mobile terminals” at Microsoft in September 2013 and the acquisition by Siemens in their joint venture, Nokia has continued to refloat its equipment business for operators, yet very bad shape for barely two years.
By focusing on mobile broadband technologies, Espoo group once more largest mobile phone manufacturer in the world, managed to regain the confidence of operators.
In the space of two years, its share price has tripled to 8 euros. Today, Nokia’s market capitalization, EUR 30 billion, is nearly three times that of Alcatel (11 billion)
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According to press rumors, Nokia could also sell its GPS mapping Here division for $ 2 billion. Which could bring him extra cash in case of a redemption proposal partly in shares and partly in cash.
Compete with China’s Huawei and ZTE
If they marry, the two groups could be a European champion in the network equipment over 25 billion euros in turnover. A set of equivalent size to the industry leader, Sweden’s Ericsson, but also able to compete with Chinese manufacturers, such as Huawei or ZTE.
The new entity would employ some 120 000 people in the world and could benefit from Nokia’s expertise in mobile networks and Alcatel’s fixed.
For observers, such a linkage would allow both groups to reach the critical size that has done so much their lacking in recent years. This would allow the new entity to achieve economies of scale. And to propose the operators subject to competitive pressure more and more fierce, more competitive prices.
Group dormant
Arriving at the head Alcatel in April 2013, Michel Combes has been trying for almost two years, to straighten a group dormant. Formerly European flagship technology, Alcatel-Lucent has never recovered from the merger that gave birth in 2006. The American Lucent and the Alcatel French with too different corporate cultures, the Registry has simply not taken.
To this was added the group’s inability to monitor the uses and technologies in mobile telephony. Undisputed specialist in fixed Internet, Alcatel missed the turn of 3G mobile Internet. This prompted European operators to prefer Ericsson, Nokia and China’s Huawei.
Alcatel was also present on too many divisions, and in too many markets. And therefore unable to reach the famous critical size necessary to achieve economies of scale. Result, too greedy in cash, the equipment has arrived at the highest, burn up 800 million euros in cash per year.
To cope with an abysmal debt end 2012 ( at that time € 5.7 billion), the group had a pledge of his best assets: a portfolio of tens of thousands of patents in order to obtain a loan of 1.6 billion euros from banks Goldman Sachs and Credit Suisse
See also:. Alcatel-Lucent, the dream of return to equilibrium
Concerns for Job
This is to remedy this, Mr. Combes set up in October 2013, the “Shift” plan. It was to save 2 billion euros per year, releasing the group activities that do not relate fairly and eliminating 10,000 jobs worldwide, including 700 in France.
“Since his arrival, Michel Combes says he wants to save the company and now he wants to sell to a foreign group that produces the same” , is worried a union source. Employees have indeed led the massive job losses that Nokia has not hesitated to make in recent years. And fear the existence of duplication between the two groups.
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