Reuters:
ALCATEL IS in talks to buy smaller American rival Lucent Technologies and create the world's biggest telecoms equipment company with combined sales of ¤21 billion (US$25.33 billion).
The new group will be incorporated and headquartered in France, two sources close to the matter said on Friday, and Alcatel intends to keep its stake of almost 10 per cent in European defense electronics group Thales, amid market speculation it could sell the stake to defense and aerospace group EADS to facilitate the planned merger.
An agreement could be announced as soon as next week, the sources added. A spokeswoman for Alcatel declined to comment.
The two companies ended advanced merger talks in 2001 after Lucent balked at the idea of Alcatel domination.
The Lucent management that broke off the talks five years ago has since been replaced.