Lucent May Sell Fiber Unit To Furukawa: Report
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Lucent Technologies Inc., the AT&T spin-off that has run into major financial problems, is said to be near a deal to sell its fiber-optics unit to Furukawa Electric Co. of Japan for $2.75 billion (3.16 billion euros), the Wall Street Journal quoted people familiar with the matter as saying. The sale of the division is "crucial" to Lucent's restructuring plan.
All is not set in stone, though. Talks with Furukawa could fall apart, or a bidder like Italy's Pirelli SpA or France's Alcatel SA could try to top Furukawa's bid at the last minute, the Journal said. As of now, though, the paper said Furukawa is the "clear front-runner." If Furukawa does buy the unit, it would turn around and form two joint ventures with Hickory, N.C.-based CommScope Inc.; one for the fiber-cable portion of the company and the other for the fiber portion, the paper said. CommScope would also invest $600 million to $700 million in the joint ventures.
The paper said that Lucent needs to close a sale of the unit by Sept. 30 so it can spin off the remaining portion of its microelectronics unit Agere Systems. The banks that lent Lucent $4 billion have required Lucent raise $2 billion in nonoperating cash to complete the spinoff, the Journal also said. Credit agencies are likely to favorably view such a sale of the Norcross, Georgia company that would also see the elimination of about 6,000 workers from Lucent's payroll, the paper added.