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![]() Wednesday, January 13, 1999 Published at 17:51 GMT ![]() ![]() Business: The Company File ![]() Lucent strikes Internet mega-merger ![]() Lucent's Rich McGinn: the acquisitions won't stop with Ascend ![]() Lucent Technologies, the US telecoms equipment leader, has struck a $20bn (£12bn) merger deal with computer networking firm Ascend Communications. The takeover follows a number of similar tie-ups in recent years as the telecommunications and computer network industries blur into one. The Internet revolution has seen a convergence of the two industries as their firms fight to supply the infrastructure vital to the online environment - computer networks linked by telephone lines.
"This merger makes our portfolio broader and more powerful, and gives us the edge as we develop the next generation of networks," Lucent's chief executive Richard McGinn said in a statement. Lucent will pay the $20bn bill for Ascend with its own shares under the terms of the takeover deal which was approved by the boards of both companies. Each share of Ascend will convert into 0.825 shares of Lucent. The deal values Ascend at $89 a share, well above the $74.95 share price Ascend closed at on Tuesday. News of the deal saw Ascend's share price defy sharp across-the-board falls on the US share market on Wednesday. At 1100 local time in New York (1600 GMT), Ascend was trading at $78.75, up $3.80. Lucent had fallen $6.12 to $101.75. Buying spree Lucent announced on Monday that it had agreed to buy Kenan Systems Corporation, a billing software company, for $1.4bn. Lucent has made a series of acquisitions since it was spun off from AT&T in 1996 and Mr McGinn said the deals would not stop with Ascend. Lucent said no decision had been made regarding the future of an alliance between Ascend and France's Alcatel to develop next-generation Internet access products, saying it will look at the agreement after the merger is completed.
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