Alcatel-Lucent looking to sell its enterprise business: Report

Franco-American telecoms company Alcatel-Lucent is in talks with three potential buyers for its business selling telecoms equipment and services to corporations and a decision on the sale is expected by March, said a Bloomberg report.

Alcatel-Lucent Chief Executive Michel Combes, who is leading a turnaround and debt-reduction plan at the group that includes 1 billion euros in divestments, has brought in Lazard to help with the sale, sources told Reuters in November.

Bloomberg reported that Unify, a Gores Group LLC and Siemens AG venture, was among the interested parties, alongside "an industrial company from outside the U.S. and a Chinese investor". The potential buyers are preparing second round bids.

Alcatel declined to comment on Monday.

The loss-making company has tried to sell its activities aimed at corporate clients before. In 2011, it explored the sale of the enterprise business but found no takers. It sold the still-growing part of the division - call centre software unit Genesys - to private equity firm Permira for $1.5 billion.

Alcatel does not disclose revenue from its enterprise activity. It said sales to corporate clients and the government brought in 959 million euros last year. Analysts say the enterprise business is most probably losing money.

Bloomberg reported that sales from the enterprise unit were 764 million in 2012 with an operating loss of 12 million euros, citing an unnamed source.

In September 2013, Reuters cited sources to say Nokia was pursuing the acquisition of parts of Alcatel-Lucent, but the report was soon quashed by the Wall Street Journal.

Back in October 2013, Alcatel-Lucent had announced it plans to cut 10,000 jobs globally by 2015, in an attempt to save costs. The announcement drew much flak however, from the French government. The country's president, Francois Hollande had soon after called on the company to try to save as many jobs as possible in France. Soon afterwards, the French prime minister, Jean-Marc Ayrault, threatened to block the loss of jobs in France, which quickly resulted in falling share prices for the company, with investors becoming more wary seeing the cost-cutting strategy being thwarted before it even began.

© Thomson Reuters 2014