Alcatel-Lucent Talks With Unify Over Enterprise Unit Sale – Report

Alcatel-Lucent’s drive to pare down its business units and focus on core segments such as mobile phone networks, could advance forward a step.

Citing three unnamed sources, Bloomberg reported that the sale of Alcatel-Lucent’s enterprise group – which sells telecommunications products and services – is currently being considered.

UC Move

The enterprise business generated about $1 billion (£609m) in sales in 2012, but also posted a $16.4 million (£10m) loss that year. However, it could be a boon for Unify – once known as Siemens Enterprise Communications until a name change in October – which is looking to grow its capabilities and compete more aggressively with the likes of Cisco Systems in the unified communications (UC) space.

The potential buyers – which also reportedly include an industrial firm outside of the United States as well as a Chinese investor – are expected to file a second round of bids soon, with a decision coming before March. The sources said the business unit could be valued at as much as $342 million (£208m).

The sale of the enterprise business would be part of a larger restructuring effort – dubbed The Shift Plan – put forth by CEO Michael Combes to get the embattled Alcatel-Lucent back on solid financial footing. Among the key parts of the plan are cutting 10,000 jobs and selling off businesses in hopes of saving $1.36 billion (£828m) by the end of 2015. Combes wants to shift the company away from being a general telecommunications equipment vendor to focusing on such high-growth areas as IP networking and ultra-broadband access.

Profit Struggle

Since its creation in 2006, Alcatel-Lucent has rarely made a profit, has undergone five other restructuring efforts and has continued to struggle against such competitors as Ericsson and Huawei Technologies.

Combes has pushed back at critics of The Shift Plan, arguing that the company wouldn’t survive without the job cuts and other efforts. “I’m convinced that we have a plan that is coherent, that is complete, that addresses all the problems the company is facing and can get it back on its feet,” he told French politicians in October 2013.

Alcatel-Lucent and Unify officials have declined to comment on the reported deal.

Unify unveiled its new name during a global event in October 2013, a rebranding effort that took three years. The company is building out its Project Ansible initiative, a UC platform designed to seamlessly aggregate all communications streams – from voice and video to social software, analytics, text, search and business applications – and to enable businesses to manage it all centrally via a single common user interface. Unify in December named Dean Douglas as its new CEO.

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Originally published on eWeek.