Alcatel-Lucent's (NYSE: ALU) rumored move to divest its enterprise equipment division--one that may be worth $1.5 billion--would enable the Franco-American vendor to put more money back into enhancing the product sets it sells to wireless and wireline service providers.
Coming at a time when Alcatel-Lucent could be reporting its first profitable first quarter, a Wall Street Journal report revealed that the vendor has been working with advisers to look at options for the business. In addition to selling the enterprise business to one company, it could launch an IPO for the unit.
Potential bidders for the unit include enterprise-focused companies such as Microsoft (Nasdaq: MSFT) and Hewlett Packard (NYSE: HPQ), traditional telecom vendors like Ericsson and other private-equity firms.
The vendor's enterprise business may be profitable and growing, but it only accounts for about 10 percent of its total annual revenue, with the other 90 percent being focused on selling equipment and services to major wireless and wireline service providers.
While Alcatel-Lucent has not reported its Q1 earnings yet, the vendor did report growth in all of its carrier segments in Q4 2010, including growth in IP/routing, optics, and wireline.
- Wall Street Journal has this article
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