Alcatel-Lucent, Nortel finalize UMTS terms

With the closing of Lucent Technologies and Alcatel’s merger, the two companies are cleaning up their own separate consolidation plans, most notably Alcatel’s plans to buy Nortel Network’s UMTS business. Nortel today said it has finalized its $320 million purchase agreement with the new Alcatel-Lucent, expecting the deal to close in less than 90 days.

The deal is still subject to negotiations with the two companies unions and other employee representatives, but on the closing date, about 1700 Nortel employees in its UMTS access business will transfer to Alcatel-Lucent. The combined UMTS operations of the three companies will send Alcatel-Lucent into double digits in market share--up to 18% by some estimates--putting the new vendor behind Ericsson and the combined Nokia-Siemens in global 3G equipment sales.

Nortel is holding on to its CDMA and other radio access divisions, including its new work in emerging WiMAX technologies, but since its financial trouble of recent years, the company’s management has said it would shed under-performing business units.