Alcatel-Lucent CEO Resists M&A Tide

As the pieces of insolvent Nortel Networks are auctioned off one by one and a wave of telecommunications-equipment consolidation threatens to wash ashore, Alcatel-Lucent CEO Ben Verwaayen swims against the tide.

Said Verwaayen:

“I’ve said many times before, M&A is not the way out of our problems. We need to fix our own stuff.”

Alcatel-Lucent’s industry counterparts might take to mergers like 18th-century aristocrats took to the waters, but Verwaayen doesn’t believe that consolidation is a panacea.

Considering the genealogy and history of his company, one can’t fault Verwaayen for his stance. Alcatel bungled acquisition after acquisition, and Lucent fared nearly as badly at the mergers game. Then Alcatel and Lucent came together in a poorly conceived and horribly executed merger that haunts the company to this day.

It’s no wonder Verwaayen doesn’t see M&A activity as a solution to what ails Alcatel-Lucent. Since joining the company a year ago, his task has been to get the rusted corporate hulk out of dry-dock and back on the high seas.

It’s not an easy task: Alcatel-Lucent hasn’t managed a quarterly profit since it was formed through merger three years ago.

The company’s shares are up this year, however, demonstrating that hope springs eternal in the minds of optimistic investors. Some market analysts are even calling for an upswing in telecommunications spending next year.

Says Verwaayen:

“In my second year, I want to get Alcatel-Lucent used to winning again. By the third year, we will be a normal company.”

He’s setting the bar pretty high.

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