Alcatel-Lucent Chiefs to Step Down
Filed at 4:06 a.m. ET
PARIS (Reuters) - Telecoms equipment group Alcatel-Lucent
Chief Executive Pat Russo, long rumored to be on an ejector seat, will leave before the end of the year while Serge Tchuruk, the architect of the 2006 merger, will leave on October 1.
The move comes weeks after shareholders heaped criticism on top directors following a string of profit warnings and a collapsing share price, and approved measures that would make it easier to oust them. The firm also reported a deep second quarter loss, stemming from the Lucent inheritance.
"I always thought they would both go, this way there is no loser or winner," said the chief executive of another French technology company who spoke on condition he was not be named.
The world's largest provider of fixed-line telecoms equipment, was created when Paris-based Alcatel bought Lucent of the United States. But it had trouble keeping up with technological change as the telecoms market turns more to voice over internet and mobile communications.
Its shares rose as much as 6 percent, after a 23 percent decline this year and a 55 percent fall in 2007. By 3:40 a.m. EDT the stock was up 4.4 percent at 4 euros.
"These departures are not a total surprise," said Exane analyst Alexander Peterc. "It is a good thing that the company can now move forward and put behind it the differences between the Lucent parts and Alcatel side," he added.
Henry Schacht, a former Lucent chief executive until Russo took his job in 2002, will immediately resign from the board.
Alcatel-Lucent said both Tchuruk and Russo had decided themselves to quit. It said the board would commence a search for a new non-executive Chairman and CEO immediately.
"The Board is also initiating a process to change the composition of the Board to a smaller group that will include new members," it added.
Russo jetted into her job in Paris filled with American corporate convictions that flew in the face of French culture.
She promised shareholders she would learn to speak French but did not have time to master the language.
Tchuruk, born in November 1937, is a former arms engineer born to Armenian parents in Marseilles who climbed the corporate ladder to become head of oil group Total
A tireless strategist, he engineered a restructuring of the sprawling Alcatel empire into the core telecoms activities, a defense branch that became part of Thales
His departure is likely to reopen speculation over the future of Alcatel's large stake in Thales, which Tchuruk had, according to sources close to the matter, wanted to keep. Thales shares dipped 1.3 percent.
"The merger phase is now behind us. I am proud that Alcatel-Lucent has become a world leader in a technology which is transforming our society," Tchuruk said in a statement.
"It is now time that the company acquires a personality of its own, independent from its two predecessors," he added.
Alcatel-Lucent also reported underlying April-June sales and profits which came in slightly ahead of expectations, but reported a big net loss for the quarter due to writedowns.
Nokia Siemens, Ericsson and Alcatel-Lucent are the leading players in the telecoms network market, but have been increasingly challenged by Chinese vendors Huawei
(Additional reporting by Tarmo Virki, Jessica Mead, Julien Toyer, Sudip Kar-Gupta; Editing by Louise Ireland, Tim Hepher)