Report: Flextronics likely to buy Lucent plants

Lucent Technologies Inc. might sell two of its production facilities to Flextronics International Ltd. for between US$600 million and $900 million, according to a report in Thursday's edition of The Wall Street Journal newspaper.

After beating out a host of rival contract manufacturers for the facilities, Flextronics is expected to complete the deal with Lucent within four to six weeks, the newspaper reported, citing sources familiar with the transaction.

An issue still under negotiation is who will own the inventory at the plants, according to the report.

The plants, in Oklahoma City, Oklahoma and in Columbus, Ohio are used for the manufacturing of switching and wireless-communication equipment and have been up for sale since January. About 5,400 of the plants' 9,300 employees will be affected when the facilities are sold, the report said. Lucent plans to keep some of the employees.

Lucent is carrying out a broad restructuring plan, as are many of its competitors. The network hardware maker has cut over 10,000 jobs in the past 12 months and is increasing outsourcing of production.

Speculation has mounted that Lucent itself is for sale, and there have been rumors that it might merge with French competitor Alcatel SA, which has put in a friendly bid for Lucent's fiber-optic business. The sale of that unit should bring in between $5 billion and $6 billion for cash-strapped Lucent.

"We have received several bids for both plants and hope to make our selection early this summer. The transitions should be done before the end of the fiscal year," said Lucent spokeswoman Mary Ward. She declined to confirm that Flextronics is amongst the bidders.

Officials at Flextronics couldn't immediately be reached for comment.

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