I'm sure that like me you remember all the hot air and hoo-hah that accompanied Alcatel's acquisition of Lucent Technologies back in 2006. It was promoted as a marriage of equals that would create a powerhouse of a company that would set the world agog. It wasn't and it didn't. In fact it was an unmitigated disaster that, until yesterday, had brought only losses, decline and investor misery, writes Martyn Warwick.
Alcatel, a leading light on the Paris Bourse, stumped up UDS$13 billion to buy Lucent of the US. It was evident from the off that Alcatel was very much the senior partner in the agreement and that, despite the remorseless PR spin, Lucent, that regarded itself as the personification of everything great in US business, was effectively being taken over by, of all things, a French company.
The culture and ethos of the two could hardly have been more different. Bringing them together into a coherent, functioning, efficient whole proved to be immensely difficult and distracted the management teams on both sides of the Atlantic. The company was internally-focused to the point of dysfunction. Machiavelli took charge. Politicking was rife, as was empire-building and back-stabbing and meanwhile the commercial imperatives behind the acquisition were largely forgotten and the company's sales reflected that - and then some.
Serge Tchuruk, the veteran CEO of Alcatel became chairman of the new enterprise. Now retired, he was a French businessman of the old school who, in his dedication to making the thing a success, even went so far as to offer to make the ultimate sacrifice for the sake of the new company. He agreed to leave Paris and move to New Jersey for a couple of years to oversee the integration of the two organisations. Greater love hath no man. Have you been to New Jersey? The Left Bank it ain't.
Had he gone to America the sorry tale of the company's fall from grace might have been different, but politics reared its ugly head again and the post of CEO went to Patricia Russo, an unapproachable executive (well, we couldn't get anywhere near her for an interview, anyway) who made lots of promises about dividing her time between the US and France and committed to learning the language. Except that she couldn't or didn't and for more than 90 per cent of her time at the helm remained resolutely ensconced in her redoubt in picturesque Murray Hill.
Russo presided over a the consistent decline of Alcatel Lucent. On her watch the company shares lost 80 per cent of their value and she should have been removed when it (soon) became evident that she wasn't up to the job. However, for reasons that have never been made clear, she retained the board's backing for far, far too long.
» This story continues on page 2. Please click here to read
please sign in to rate this article
45312