Alcatel-Lucent named Michel Combes as its new CEO. The Frenchman, best known for navigating Vodafone's European operations through the financial crisis, will take over the CEO role starting April 1, and will replace Ben Verwaayen, who announced earlier this month he would step down.
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Combes, 51, will take the CEO spot effective April 1. He will also join the company's board, subject to the approval of shareholders at the Alcatel-Lucent annual general meeting on May 7. Combes, a 20-year industry veteran, has a reputation as a cost-cutter, which fits with part of Alcatel-Lucent's current strategy to reduce expenses. He also served as CFO and senior executive vice president of France Telecom.
"Combes is a good choice since he has a 20 year track record in telecoms, and knows the French political establishment well," an industry analyst told Reuters. ""He has experience managing difficult situation like the recession that hit southern Europe when he was at Vodafone. But the challenges at Alcatel are of a different magnitude: everything easy has already been tried and nothing has worked."
The first of these challenges could be the a report that the French government is evaluating options that include taking a minority investment in Alcatel-Lucent in order to protect its patent holdings, unnamed sources familiar with the matter told Bloomberg.
The French administration has been weighing what action is needed following a €2 billion loan by Alcatel-Lucent last December that was criticised by officials, other people familiar with the matter said. The deal, which was underwritten by Credit Suisse and Goldman Sachs, saw part of the equipment vendor's intellectual property portfolio secured against the loan.
A French official, who told Bloomberg he didn't want to be identified, said that the government could acquire a minority holding in Alcatel-Lucent using the Strategique d'Investissement state vehicle. This government unit is tasked with acquiring minority interests in companies it considers crucial to France's competitiveness, and in the past has taken stakes in SIM card vendor Gemalto and fibre supplier Nexans.
Other options discussed by French officials have also considered supporting a merger between Alcatel-Lucent and rival Nokia Siemens Networks, or a direct investment in Alcatel-Lu's submarine cable business, according to the sources.
Alcatel-Lucent's patents, boosted following the inclusion of those developed by Bell Labs research centre, are said to focus on video conferencing as well as data compression and transfer. The value of the portfolio is said to comprise a meaningful proportion of the company's available assets.
Separately, the company's shares continue to attract a range of analyst ratings. A research note from AlphaValue had Alcatel-Lucent shares as a "buy" with target price of €2 (the shares are currently around €1.15), while Credit Suisse reiterated a "neutral" rating and CIC Securities repeated its "sell" rating, according to the Daily Political.
For more:
- see this Reuters article
- see this Bloomberg article
- see this Daily Political article
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