Alcatel, Lucent `Confident' of Addressing Concerns (Update1)

April 29 (Bloomberg) -- Alcatel SA and Lucent Technologies Inc. are ``confident'' they will address U.S. Representative Duncan Hunter's security ``concerns'' arising from their planned combination in a $13.4 billion share swap.

``We have put in place an approach that will˙protect sensitive U.S. technologies,'' Paris-based Alcatel spokeswoman Regine Coqueran today said in an e-mailed statement. ``Both Lucent and Alcatel have already committed to form a separate, independent U.S. subsidiary to manage˙sensitive˙business with U.S. government agencies.''

Hunter, chairman of the House Armed Services committee, said in a letter to U.S. President George W. Bush that he has ``grave concerns'' with the Alcatel's acquisition of Lucent, the Financial Times reported today. The deal might allow countries where Alcatel does business, including Burma, China, Cuba, Iran and North Korea, to acquire technology and other sensitive information from Lucent, the newspaper said, citing the letter.

Hunter's letter is the first sign of political opposition to Alcatel's purchase of Murray Hill, New Jersey-based Lucent. U.S. politicians, citing national security risks, earlier this year forced Dubai's government-owned DP World to seek an American buyer for terminal operations at six U.S. ports. Last August, congressional concerns about energy security persuaded Chinese oil company Cnooc Ltd. to abandon attempts to buy Unocal Corp.

Hunter is Republican from California.

`Precedents'

Alcatel's purchase of Lucent, the biggest U.S. maker of telephone equipment, would challenge Cisco Systems Inc. as the world's largest maker of networking gear. Alcatel and Lucent had a combined $25 billion in sales last year.

Alcatel noted today that Lucent has nominated former U.S. Defense Secretary William Perry, former Director of the Central Intelligence Agency James Woolsey and ex-Director of the National Security Agency Kenneth Minihan to compose the board of the subsidiary handling business with U.S. government agencies. Lucent's research unit, Bell Laboratories, does work for the U.S. government.

``There are substantial precedents for the approach we plan to pursue,'' Alcatel's Coqueran said.

U.S. Senator Charles Schumer -- a New York Democrat who opposed DP World's purchase of the six U.S. ports -- said April 6 he will support the Alcatel-Lucent transaction as it isn't a threat to U.S. security.

 

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