Juniper, Ericsson Linkup Possible, Analysts Say"
If Lucent Technologies and Alcatel marry their businesses, Ericsson and Juniper Networks could be next at the altar, analysts said Monday.
Citigroup told clients in a note that rising pressure on equipment vendors to build scale makes such a transaction "increasingly likely." It added that it sees "a good fit" between the Swedish market leader in mobile networks and California-based Juniper.
"While Juniper is not for sale, at the right price a deal could make sense," Citigroup said.
Citigroup's review of the impact of a deal between Alcatel and Lucent, which would have a market value of $33 billion, on telecoms-gear makers revealed Tellabs, based in Illinois, also was likely to be courted.
Citigroup said a Lucent-Alcatel deal "could be a blow to Tellabs." It could increase Alcatel's chances of winning a major optical networking technology contract at Verizon Communications.
It added that Alcatel's superior technology in this area and Lucent's strong relationship with Verizon could help the French firm bag the deal.
Another singleton looking for company could be Canada's Nortel Networks, analysts for Prudential Equity Group said.
Desjardins Securities, however, noted that any takeover of Nortel will remain unlikely until the Canadian group has completed its contract review and filed it annual report, expected by the end of April. It considers Ericsson the most likely bidder.
Among other network-equipment firms, Citigroup said industry giant Cisco Systems would suffer only minimal impact, as its business is focused on the IP router market, where Lucent has no share and Alcatel has a weak position.
Lucent and Alcatel said Friday they were in advanced talks over "a merger of equals."
-Aude Lagorce; 415-439-6456; AskNewswires@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 27th March 2006
