US President George W. Bush has approved the proposed US$11.8 billion takeover of Lucent Technologies Inc by French-owned Alcatel, saying the merger of the two telecommunications equipment companies does not present any major national security concerns.
White House press secretary Tony Snow, traveling with Bush in Hanoi, said on Friday night that the president agreed with the recommendation of the Committee on Foreign Investment in the US to allow the deal to go through, removing the last major regulatory hurdle to the combination of the two companies.
The merged company will become one of the world's largest telecommunications equipment suppliers, generating about US$25 billion in sales and accounting for about an 18 percent share of the market. The combined company will trim about 9,000 jobs, saving US$1.8 billion over three years.
Snow said Alcatel and Lucent agreed with US government agencies to enter into "robust and far-reaching agreements designed to ensure the protection of our national security."
The merger required the approval of the foreign investment council because of Lucent's work on sensitive government contracts.
"The president's decision demonstrates the commitment of the United States to protect its national security interests and maintain its openness to investment, including investment from overseas, which is vital to continued economic growth, job creation, and an ever-stronger nation," Snow said in a statement.
Lucent, the successor company to the legendary Bell Labs, is headquartered in Murray Hill, New Jersey, and employs about 29,800 people worldwide. Lucent chief executive officer Patricia Russo will run the new company from Paris, where Alcatel is based.