Network equipment manufacturers Alcatel SA and Lucent Technologies Inc. are inching closer to a marriage as the boards of both companies have approved additional discussions that could lead to a US$34 billion merger, according to a published report Wednesday.
The board meetings were held to brief directors on the status of the talks and to discuss details of a potential merger. No board action was required, but the meetings are considered significant as it shows that the discussions are advancing, The Wall Street Journal reported Wednesday, citing sources familiar with the talks.
A merger could bring about massive annual savings of about $4 billion thanks to synergies when the companies' businesses are combined, the report said.
A spokesman for Lucent in London declined to comment, saying Lucent considers the report to be based on "rumors and speculation in the marketplace."
France's Alcatel proposed acquiring U.S.-based Lucent in a stock swap deal and the two sides have been discussing the deal for weeks. However, the chances of a merger actually happening are only slightly better than 50 percent, The Wall Street Journal said.
Alcatel has only been willing to confirm that it has put in a formal bid for Lucent's fiber-optic business.
Officials at Alcatel were not immediately available for comment.