Alcatel-Lucent’s board of directors has given its full support to the vendor’s €15.6 billion acquisition by Nokia, despite dissention among shareholders.
The Franco-U.S. equipment maker said on Thursday it has completed a merger consultation with its French Group Committee (Comité de Groupe France) – a steering group representing employee interests – as per French regulations.
The committee indicated it does not oppose the Nokia deal, leading the board to express its support for the merger.
"The board is very pleased to see that the consultation of Alcatel-Lucent’s French Group Committee on the proposed combination with Nokia has been completed in line with the contemplated timing and encourages both teams to continue working towards the creation of a European champion and global leader in ultra-broadband, IP networking and cloud applications, for the benefit of our clients, employees and shareholders," said Alcatel-Lucent chairman Philippe Camus, in a statement.
The French Group Committee’s opinion will be submitted along with Alcatel-Lucent’s offer response to France’s financial markets watchdog, the Autorité des Marchés Financiers (AMF). That will take place once Nokia files its takeover bid with AMF, which will happen once its offer has received regulatory approval.
While the deal has received backing from Alcatel-Lucent’s board, some of its shareholders remain unconvinced.
According to a Wall Street Journal report last week, during Alcatel-Lucent’s annual meeting, some holders questioned the logic of mergi ng with Nokia, a company that suffered a spectacular fall from grace in the mobile handset market and also had to pare back its infrastructure division to narrow its focus on mobile broadband.
Another shareholder reportedly said Alcatel-Lucent should have negotiated a higher offer from Nokia.
While Alcatel-Lucent’s shareholders do not get to vote on whether to accept Nokia’s offer, they can opt not to tender their shares.
Under the terms of the deal, Nokia requires more than 50% of Alcatel-Lucent’s shares to be tendered.
According to the Journal, chairman Camus and CEO Michel Combes defended the Nokia tie-up, saying it was vital to bolster Alcatel-Lucent’s position in the mobile infrastructure market.
"We lacked the critical mass," Camus said, in the report, while Combes said the deal would make Alcatel-Lucent a leader in one of the biggest technological revolutions since the railroads.
"To wait would be to forfeit the race to the future, and risk losing everything," he warned.
