Lucent to sell Mesquite unit to Tyco
(Dallas Times Herald - 1999)
Smarting from a yearlong beating on Wall Street,
Lucent Technologies Inc. said Monday that it
would sell its Mesquite-based Power Systems
business to Tyco International Ltd. for $2.5
billion in cash.
Lucent announced its intention to sell the unit,
which employs 2,200 in Mesquite and 4,700 overall,
in May, saying it wants to concentrate on faster-
growing business areas, including optical and data
networking. No layoffs are expected, officials said.
"It gives us a unique opportunity to continue to
grow and expand our business into other geographic
markets and industries," said Bruce A. Brock, Power
Systems' vice president and chief operating officer.
The unit, which makes equipment that powers telephone
networks and computers, had revenue of $1.2 billion
in 1999 and operating income of more than $100 million.
Mr. Brock said that Power Systems is growing at a
rapid clip and that its affiliation with Tyco, of
Pembroke, Bermuda, will further boost the business.
Tyco makes electronic components.
"Lucent is a fine company, but they wanted to center
their strategies on broadband and the Internet," he
said. "We are part of...[Tyco's] strategic future."
Tyco chairman and chief executive L. Dennis Kozlowski
said in a written statement: "The acquisition of LPS
is an excellent fit for Tyco. It provides a link
between Tyco Electronics' electronic components and
TyCom's communications networks."
Lucent, of Murray Hills, N.J., is in the midst of re-
defining itself and spinning out parts of the company
that don't fit its strategy of becoming a premier
optical networking player. The company has fallen
behind competitors such as Nortel Networks Corp. in
producing equipment that can transmit voice and data
over fiber optics.
In October, Lucent spun out its enterprise networks
group, which makes telecommunications equipment bought
by businesses, into Avaya Inc. Lucent, which was spun
out of AT&T Corp. in 1996, is also planning to sell
its microelectronics business, which makes optical and
Tyco closed down $4.44 Monday to $49.75. Lucent, which
has fallen almost 70 percent in 2000, closed up $1.38 to