Alcatel-Lucent talking to Unify about potential enterprise unit sale

Tools

Alcatel-Lucent (NYSE: ALU) has begun discussions to sell its enterprise unit to Unify, a joint venture created by Siemens and the Gores Group, reports Bloomberg, citing three people close to the talks.

The enterprise unit continues to be a drain on Alcatel-Lucent's bottom line. In 2012, the unit reported an $11 million operating loss on $702 million of revenue.

Besides Unify, one of the sources told Bloomberg that the enterprise unit has also caught the interest from a non-U.S. industrial company and an unnamed Chinese investor.

Second round bids are being prepared and a decision could be made before March. The unit, according to Bloomberg's sources, could be worth up to $230 million.

In 2011, Alcatel-Lucent sold its Genesys software division to Permira, but has struggled to find a buyer for the whole unit.

Alcatel-Lucent and Unify would not comment on any talks, nor would Siemens and the Gores Group.

Selling the enterprise unit is part of a broader effort by Alcatel-Lucent's CEO Michel Combes to sell off various assets to reduce $1.34 billion in assets and refocus on more profitable areas such as wireless and IP networking.

In December it announced a deal to sell LGS Innovations, its public sector subsidiary, to Madison Dearborn Partners and CoVant for $200 million.

Buying Alcatel-Lucent's enterprise division would also enable Unify to more effectively compete with Cisco (Nasdaq: CSCO) in North America, where it has been the dominant equipment supplier.

For more:
- Bloomberg has this article

Related articles:
Alcatel-Lucent sheds public sector division LGS Innovations for $200M
Alcatel-Lucent searches for another buyer for its struggling enterprise unit
Alcatel-Lucent's enterprise sale to Permira Advisers falls through
Alcatel-Lucent continues to look at options for its enterprise division

Filed Under