Alcatel-Lucent (NYSE: ALU) has begun discussions to sell its enterprise unit to Unify, a joint venture created by Siemens and the Gores Group, reports Bloomberg, citing three people close to the talks.
The enterprise unit continues to be a drain on Alcatel-Lucent’s bottom line. In 2012, the unit reported an $11 million operating loss on $702 million of revenue.
Besides Unify, one of the sources told Bloomberg that the enterprise unit has also caught the interest from a non-U.S. industrial company and an unnamed Chinese investor.
Second round bids are being prepared and a decision could be made before March. The unit, according to Bloomberg’s sources, could be worth up to $230 million.
In 2011, Alcatel-Lucent sold its Genesys software division to Permira, but has struggled to find a buyer for the whole unit.
Alcatel-Lucent and Unify would not comment on any talks, nor would Siemens and the Gores Group.
Selling the enterprise unit is part of a broader effort by Alcatel-Lucent’s CEO Michel Combes to sell off various assets to reduce $1.34 billion in assets and refocus on more profitable areas such as wireless and IP networking.
In December it announced a deal to sell LGS Innovations, its public sector subsidiary, to Madison Dearborn Partners and CoVant for $200 million.
Buying Alcatel-Lucent’s enterprise division would also enable Unify to more effectively compete with Cisco (Nasdaq: CSCO) in North America, where it has been the dominant equipment supplier.
Jan 13, 2014 By Sean Buckley