Lucent wanted merger, not takeover

Executives at Lucent Technologies have said that the company decided to walk way from merger talks with Alcatel because what they envisaged as a merger of equals became a takeover bid.

Henry Schacht, Lucent's chairman and chief executive, said: "We entered the talks with Alcatel because it appeared to be an extraordinary opportunity to jump-start the turnaround and start a new company."

"We decided it was in the best interests of our shareholders, customers and employees to continue on our own path," he added. "Walking away was a sign of strength and it is our belief that the turnaround is on course and will be executed."

Speaking at the SuperComm show in Atlanta, Schacht also said that the company is on the road to recovery despite last week's collapse of the proposed $32bn merger with Alcatel.

He explained that Lucent's central strategy is to focus on the sale of telecoms equipment to major service providers. "Our turnaround plan envisions quarter-to-quarter progress and we continue on that path," he said.

Schacht confirmed that he was pleased with the progress Lucent has made, but said the restructuring plan is not complete.

"Our job now is to build on the progress we've made and pick up the pace," he said. "As we finish the third quarter and begin to look at our fiscal 2002 plan, we are going to accelerate our cost-reduction efforts. We will begin rolling these out in the next several weeks and some a bit sooner."

Lucent told analysts that the company's third-quarter results should be in line with Wall Street expectations as long as the company maintains its current sales pace. Schacht added that business in the company's quarter to June will improve from the preceding quarter.

Wall Street analysts expect Lucent to post a loss of 21 cents a share in the third quarter, according to First Call.

In the past few months, Lucent has eliminated roughly 10,000 jobs.