Alcatel-Lucent offloads enterprise biz to Chinese investment firm

Alcatel-Lucent has sold its enterprise division to China Huaxin Post & Telecommunication Economy Development Center for 202 million euros (US$255.58 million), but will retain a minority stake in a newly-formed holding company that will be incorporated in France. 

The announcement Wednesday seals a deal that was first initiated in February 2014, when the French networking company said it was in discussions with China Huaxin to divest its enterprise unit. The move is part of Alcatel-Lucent's Shift Plan, which is aimed at cutting costs and selling non-core assets to steer the organization toward more profitable market segments.

Following the sale, in which Alcatel-Lucent will receive 202 million euros in cash proceeds, the newly-formed enterprise business will continue to work with its former owner on "a privileged business relationship basis", the company said in a statement. It added that the new enterprise business would continue to invest in core segments where it has strong presence, specifically enterprise communications and networking, as well as evaluate new opportunities in high growth countries, verticals, and cloud. 

The business unit currently has more than 2,700 employees worldwide and operations in more than 80 countries. 

China Huaxin President Yuan Xin said in the statement: "We are really excited by the acquisition of Alcatel-Lucent Enterprise. Our long-term investment approach will help Alcatel-Lucent Enterprise deliver on its ambition while enabling us to strengthen our strategic position in the enterprise communications arena."

The Chinese investment firm focuses primarily in the technology market and its beneficiaries include Yangtze Optical Fiber & Cable Company. 

Gartner in February said the deal would expand China Huaxin's limited enterprise business portfolio, giving it access to Alcatel-Lucent's OpenTouch unified communications platform, as well as a large installed base of OmniPCX telephony, particularly in Europe, Middle East, and Africa.

Alcatel-Lucent in October 2013 said it would slash some 15 percent of its overall workforce, with 10,000 job roles to be cut by end-2015 across Europe, Asia-Pacific, and the United States. 

The company last week said it would be implementing part of a new undersea cable system, operated by the South East Asia-Middle East-Western Europe 5 (SEA-ME-WE 5) consortium, which will span 20,000 kilometres between Singapore and France. Alcatel-Lucent has been contracted to build the segment between Sri Lanka and France, while NEC will be responsible for the segment between Singapore and Sri Lanka.