Alcatel-Lucent Completes Sale of Enterprise Biz to Chinese Firm
Alcatel-Lucent Enterprise is now owned by China Huaxin, and will look to grow its networking and communications businesses.Alcatel-Lucent has completed the sale of 85 percent of its enterprise networking and communications business to Chinese investment company China Huaxin, the latest move by the company under its year-old Shift Plan to shed asset, cut costs and refocus on more profitable markets. Under terms of the $255 million deal, China Huaxin will hold 85 percent of Alcatel-Lucent Enterprise, while Alcatel-Lucent will retain the other 15 percent. In addition, Alcatel-Lucent will continue to work closely with its former parent company in what officials described as a "privileged business relationship." In a brief conference call with analysts and journalists Oct. 1, Alcatel-Lucent Enterprise CEO Michel Emelianoff said the new company has ambitious plans to double the size of the business within five years, transform it from one that sells products to one that deals in "business outcomes" and to become the world's largest enterprise communications vendor. "The enterprise communications market is a market that is … fundamentally transforming itself," Emelianoff said during the conference call, noting the growing use of mobile devices and technology trends such as software-defined networking (SDN).
Alcatel-Lucent, which has had few financial bright spots since it was formed in 2006, has begun a huge transformation under the Shift Plan, which CEO Michael Combes introduced in 2013 in hopes of cutting costs and refocusing the company on growth areas, including IP networking and the cloud. The plan also calls for cutting as many as 10,000 jobs in hopes of saving $1.3 billion in expenses by the end of 2015, and shedding assets in hopes of gaining another $1.3 billion.