Merger control - Alcatel-Lucent

Alcatel-Lucent Cleared by the EU to Transfer its Space Assets to Thales

PARIS, April 10 /PRNewswire-FirstCall/ -- Following the unconditional clearance decision of the European Commission, Alcatel-Lucent (Euronext Paris and NYSE: ALU) announced the transfer of its shareholdings in two space joint venture companies, Alcatel Alenia Space (67%) and Telespazio (33%), to Thales. This final regulatory approval permits the transfer of Alcatel-Lucent's satellite shareholdings, in addition to its railway signaling business and its integration and services activities for mission-critical systems which were already transferred to Thales in January.

In December, Alcatel-Lucent and Thales had already reached an agreement to extend and reinforce the partnership between the two companies to exploit the synergies that can be obtained from their complementary skills, the highlights of which include the following: commercial cooperation for the major institutional markets such as Defense, Security, Energy and Transportation markets, cooperation in space activities especially in Mobile TV and enhanced cooperation in Research and Development. Besides, the signing of a mobility charter for employees is planned between Alcatel-Lucent and Thales which will stimulate the sharing of talent and exchange knowledge between the two companies.

Alcatel-Lucent and the French State entered in January 2007 into a new Shareholders' Agreement for a renewable period of 5 years, replacing the former shareholders' agreement concluded in June 1998 between Alcatel, Groupe Industriel Marcel Dassault and the French State.

The terms of the overall transaction which is now completed are:
- With respect to the transfer of the space, transportation & security activities, 25 million new Thales shares were issued in favor of Alcatel-Lucent, as well as a cash payment of Euro 710 million.
- As a result, Alcatel-Lucent's interest in Thales increased from 9.46% to 20.95%. The French State remains Thales' main shareholder with a 27.29% stake (compared with 31.26% previously).
- The value of the 67% shareholding in Alcatel Alenia Space will be re-assessed by an independent expert at the beginning of 2009, which may trigger an upward value adjustment.
- Alcatel-Lucent has four members of the Thales Board.

Alcatel-Lucent should book a total capital gain before taxes of around Euro 800 million in its Q1 2007 results.

see also Alcatel-Lucent