Lucent to sell unit for lower price

Lucent Technologies Inc. has struggled for more than five months to find a buyer for its fibre unit. The US company, specialised in designing, developing, manufacturing and servicing of communication …

Lucent Technologies Inc. has struggled for more than five months to find a buyer for its fibre unit. The US company, specialised in designing, developing, manufacturing and servicing of communication systems, software and products, is now likely to sell the business for less than the agreed-upon US$ 2.75 billion, a recent press release by the company stated. Furukawa Electric Co., Comm-Scope Inc. and US glass producer Corning Inc., which agreed in July to buy Lucent“s fibre business, are in talks with Lucent about cutting the price being paid for the unit, according to the release. Although a specific sum has not been determined, about 10% could be sliced off the deal. Still, the deal is not in jeopardy of being cancelled, and final terms are expected to be announced soon. Specific details are still being negotiated. In addition to the reduction in price, the deal“s structure also is being revised in a way that will give CommScope a far smaller role in the deal. The sale of the Lucent fibre business has, in many ways, mirrored the plight of the overall telecommunications-equipment sector. When news of the deal first broke in the spring, some analysts were expecting the unit to be sold for as much as US$ 6 billion to US$ 8 billion. But throughout the year, conditions across the industry and economy deteriorated sharply, reducing the value of Lucent“s business. Problems with weak demand and overcapacity have continued during the past few months, prompting Corning to idle fibre plants for the first time in its history. The sale of the fibre business is seen as important to Lucent“s restructuring efforts as the telecom-equipment maker shores up its balance sheet. In announcing a 30% drop in sales for the third quarter, CommScope last month also said it was in talks to restructure the pact and reduce its investment.