Alcatel-Lucent in talks to divest enterprise business- sources

By Nicel Jane Avellana

Jan 12, 2014 08:18 PM EST

Sources told Bloomberg that Alcatel-Lucent is talking with possible buyers for the sale of its enterprise business. The potential buyers include the venture of Gores Group and Siemens, Unify GmbH & Co. KG. The enterprise unit is engaged in the business of selling telecommunications equipment and services to firms, the report said. It posted a €764 million or $1 billion revenue in 2012.

One source said an industrial company located outside the US as well as a Chinese investor are also interested in the unit. Bloomberg reported that Alcatel-Lucent is being advised by Lazard Ltd on the deal.

Divesting the unit would enable the Paris-based company to concentrate on its mobile phone network contracts which generates more profits for the firm. It also paves the way for Alcatel-Lucent to accomplish the goal of Chief Executive Officer Michel Combes to raise €1 billion from asset sales by 2015. In order to bring down costs as competition from Chinese network equipment suppliers heat up, Combes is also reducing the company's workforce, the report said.

The sources said the possible buyers are readying offers for the second round of bidding and that a decision could be made anytime from now to March. One of the people said the price tag for the unit could reach €250 million. In 2012, the business posted an operating loss amounting to €12 million, the report said.

Last month, Alcatel-Lucent said it would be selling its LGS Innovations business for up to $200 million. The unit gives the US government networking and satellite communication services to.

Unify is 51% owned by Gores Group, a private equity firm in the US. The remaining stake is held by Siemens. Unify, which used to go by the name Siemens Enterprise Communications, was formed in 2008 as part of the move by Siemen's to distance itself from the telecommunications business, the report said.

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