Alcatel and Lucent Technologies confirmed that they have been in discussions concerning a possible merger of the two companies. They stated that these discussions have not resulted in any agreements and have been terminated, the official statement said.
The statement confirmed for the first time that there had been talks while also stating that these talks had had failed. The statement did not however say why the discussions had faltered.
Rumors have that reported that Lucent official were happy with the proposed management structure put forward by Alcatel, which would have led to a loss of power for Lucent.
But during the negotiations Lucent insisted on the deal being organized as a merger of equals, with equal representation on the board of directors and on top management.
Alcatel was unwilling to accept such a deal for its $23.4 billion stake, which would have totaled 58% of Lucent.
Lucent has suffered from financial disappointments for some time with attempts to resolve the problem failing. Shares in the company are now one-tenth of their all-time high in 1999.
Without the financial backing Lucent will find it hard to resolve internal problems and find solutions to their fiscal underachievement.
