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Tyco buys Lucent unit
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November 13, 2000: 5:29 p.m. ET
$2.5 billion cash deal for Lucent Power Systems should add to Tyco's EPS
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NEW YORK (CNNfn) - Diversified manufacturer Tyco International Inc. is spending $2.5 billion for Lucent Power Systems, a unit of telecom equipment provider Lucent Technologies.
The division provides energy solutions and power products for the telecommunications and computer industries. Tyco said it should immediately improve its earnings per share. The unit will become part of Tyco's electronics unit.
"Previous acquisitions in Tyco Electronics continue to achieve strong top line growth and exceed cost reduction targets," said a statement from Dennis Kozlowski, chairman and chief executive of Tyco.
 Bermuda-based Tyco, which has a U.S. headquarters Exeter, N.H., has businesses ranging from electrical components to disposable medical products to fire protection and underwater telecommunications.
It has used acquisitions to spur rapid growth. But charges it has taken related to some of those acquisitions have prompted criticism from some analysts who question the strength of its reported earnings.
The Lucent unit Tyco is buying provides power supply and conversion products and back-up power equipment for telecommunications centers, such as switching stations, as well as for computer networks.
The plans to sell the unit were announced in May, with the company saying it expected to find a buyer within six months. The deal announced Monday is expected to close by the end of the year.
 Since then Lucent has issued a series of disappointing earnings reports and earnings warnings and ousted Richard McGinn as its chief executive. It announced at least 240 job cuts last week, and analysts are expecting it could see as many as 10,000 jobs eliminated. The powers systems unit has about 4,700 employees.
"As Lucent focuses on the broadband and mobile Internet markets, we recognized that the Power Systems business, and its employees, will be best positioned for future success in a company serving the electronics and power industries," said a statement from Lucent's Bill O'Shea, its executive vice president, corporate strategy and business development.
Shares of Tyco (TYC: Research, Estimates) lost $1.25 to $52.94 in trading Monday ahead of the after-hours announcement, then dropped to $49.97 in after-hours activity. Shares of widely-held Lucent (LU: Research, Estimates) gained 88 cents to $22.75 in regular-hours activity, then rose to $23.19 in after-hours trading. 
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