Alcatel-Lucent decides to retain undersea cables unit

The Paris-based Alcatel-Lucent has decided not to sell its undersea cable manufacturing unit 'Alcatel-Lucent Submarine Networks (ASN).' The Finnish global major Nokia is in the process of acquiring Alcatel-Lucent. With the latest decision of Alcatel-Lucent retaining undersea cable unit, Nokia will have the French maker of network gears including undersea cable unit once the acquisition process is complete.

The $17billion (euro15.6bn) acquisition of Franco-American group will enable Nokia to compete with the market leader Ericsson and Huawei, the Chinese firm engaged in low-cost products. Retaining the undersea cable unit will not have any impact on completing the ongoing acquisition process with Nokia.

Alcatel-Lucent had earlier announced that it planned to offload majority stake in Alcatel-Lucent Submarine Networks or spin it off as a separate business division. However, it has changed its decision and decided to retain it. The undersea cable manufacturing unit has facilities in Calais, France, and Greenwich, Britain. Rajeev Suri, Chief Executive Officer, Nokia, last week reiterated that the acquisition deal would be completed by June 2016. 

The Calais, France, and Greenwich, Britain, is the place where the transatlantic cable was manufactured in 1858 for the first time in the world. With the latest decision of Alcatel-Lucent, the undersea cable manufacturing unit will become part of Nokia after the acquisition process is over. 

France ministers advised the French sovereign fund to acquire a stake in Alcatel-Lucent Submarine Networks to retain the activities of the undersea cable as it adds to the strategic support to the France's surveillance apparatus on French soil. A spokesperson at Alcatel-Lucent said that French government has no objection on selling the unit to Nokia. Now, Alcatel-Lucent Submarine Networks unit will be developed with new group management.

French sovereign fund, Permira Advisers LLP, and PAI Partners SAS had reviewed the bids in early 2013 when Alcatel-Lucent was planning to offload undersea cable unit in initial public offering (IPO) in July 2014. Alcatel-Lucent thought of expanding beyond telecommunications.

The spokesperson said: "We constantly exchange with the government. They're aware of our decision. This will be part of discussions, but there was no objection." France's economy ministry didn't comment on this. Alcatel-Lucent's former CEO Michel Combes in last April said the undersea cable business unit would be spun off as a separate entity or floated in an initial public offering, but wouldn't be sold to Nokia. 
ASN has a huge fiber optic cable (FOC) network of 575,000 kilometers deployed across the world. It also maintains a network of 330,000 kilometers of the undersea system.