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Alcatel-Lucent seen near
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May 28, 2001: 8:10 a.m. ET
Reports say telecom gear makers could announce merger by Wednesday
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NEW YORK (CNNfn) - Alcatel, Europe's No. 4 telecom equipment maker, may announce the acquisition of Lucent Technologies this week, according to reports published Monday.
The Wall Street Journal Europe said the two companies met over the weekend and that a deal -- which the paper said is valued at about $32 billion ( 37.25 billion) in stock -- could be presented to the boards for final approval Tuesday and an announcement Wednesday.
The New York Times quoted executives close to the discussions as saying the boards could meet Monday and announce any deal Tuesday. The Times placed the deal's value at about $34 billion.
Alcatel's press office told CNN's London bureau it would not have any comment on merger speculation Monday. Efforts to reach Lucent's offices weren't immediately successful.
France's Alcatel is expected to acquire Lucent (LU: Research, Estimates) for little or no premium over its current stock price, the Journal said. However, talks could founder if Alcatel's share price continues to slide.
The new combined company would be based in the U.S. and meetings over the weekend discussed adopting a new name, instead of Alcatel or Lucent.
Among the key factors driving any merger is the $4 billion in annual cost savings projected by the companies, the WSJ said.
Alcatel wants to buy Lucent to break into the lucrative U.S. market, the world's biggest for telephone switches, fiber optics and Internet routers.
Murray Hill, N.J.-based Lucent, one of the most widely held U.S. stocks, and its rivals Nortel Networks (NT: Research, Estimates) and Cisco Systems (CSCO: Research, Estimates) dominate the industry.
Lucent has lagged competitors in the key optical equipment markets over the last few years and found itself saddled with manufacturing constraints and declining demand for its core telephone products.
Those problems led to the ouster last October of CEO Richard McGinn, who was replaced with former CEO Henry Schacht.
The company has lowered earnings guidance several times since then. On May 7, Chief Financial Officer Deborah Hopkins left the company less than a year after being wooed away from Boeing (BA: Research, Estimates). Some reports suggested Hopkins and Schacht had been at odds.
Shares in Alcatel (PCGE) fell 6.9 percent Friday in Paris to close at 31.95, valuing the company at about $34.5 billion. Lucent shares lost 13 cents to close at $9.40 in U.S. trading Friday. 
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