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Mergers, Acquisitions and Takeovers Case Study

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Case Title:

Alcatel Lucent: Merger on the Rocks

Publication Year : 2010

Authors: R Ganesh Ram, S Gollapalli

Industry: Engineering, Electrical and Electronics

Region:USA

Case Code: MAA0171IRC

Teaching Note:  Available

Structured Assignment:  Available

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Abstract:
The trans-Atlantic merger of Alcatel and Lucent Technologies was touted as the biggest telecommunication deal when it was announced in 2006. The executives of both companies, Patricia Russo and Serge Tchuruk, displayed great optimism that the merger of equals would be able to offer an 'end to end solution' to its customers in a wide range of products. But two years down the line, the combined company struggled to deliver on its promise to attain synergies and cut costs to survive in the competitive telecommunication market. It failed to integrate and internalise its culture and products and lost a considerable market share to its competitors. Investors demanded the ousting of Russo and Tchuruk in the wake of consecutive losses, which the company posted since the merger. The case highlights the integration issues in the merger of the two companies that came from two different business cultures, along with the dynamics of the US telecommunication industry.

Pedagogical Objectives:

  • To understand the dynamics of the US telecommunication industry
  • To analyse the management issues that came up while integrating the two different business cultures.
  • To analyse the challenges in merging two strong companies.

Keywords : Telecom equipment industry, Leadership, Code division multiple access (CDMA), Culture, Management style, Restructuring, Pricing, Consolidation, Product portfolio, Innovation, Technology portfolio, Wireless business, Integration, Merger dynamics, Corporate governance

Contents : 
The Alcatel Lucent Merger
Alcatel Lucent Company Information
Business Groups of Alcatel Lucent
Post Merger Integration Issues
Alcatel Lucent’s Share in Business Segments

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