Alcatel shares climbed to a year high after the company unveiled its acquisition of smaller US rival Lucent Technologies for $13.4 billion to boost the pair's clout in a consolidating market.
The French telecoms equipment provider's shares opened 6.5 per cent higher on Monday and rose 5.79 per cent this morning to reach €13.51. Lucent shares were also up 3.6 per cent in Frankfurt.
Alcatel, which together with Lucent announced the deal on Sunday, is to own 60 per cent of the combined group and expects the acquisition to boost earnings per share in the first year, excluding restructuring charges.
The two companies plan to cut about 10 per cent of their combined workforce, or about 8,800 jobs.
The new company will have total revenue of $25 billion, roughly matching current industry leader Cisco Systems and will be in a better position to negotiate prices with customers and enjoy a broader research and development base.
Patricia Russo, Lucent chief executive (53) will serve as chief executive of the combined Paris-based company, although she does not speak French. Alcatel chairman and chief executive Serge Tchuruk will act as non-executive chairman.