An announcement was made in Europe on Thursday that Thales and Alcatel-Lucent have entered exclusive negotiations for Thales to acquire the cyber-security services and communications security activities of Alcatel-Lucent. The deal is called a part of a strategic partnership to provide end-to-end solutions for securing networks.
Alcatel-Lucent said in its release that its strategy is to reposition itself as a specialist in IP networks, cloud technologies and secured ultra broadband access. Look at that last part for secured ultra broadband access, and then ask yourself if it seems right that cyber-security should be an in-house or outside effort on that front.
The press release said:
The contemplated partnership, including the transfer of Alcatel-Lucent’s network security assets to Thales, will enable Alcatel-Lucent to expand its commercial proposition in cyber-security, a stated intention of The Shift Plan announced last year. Alcatel-Lucent will be able to offer existing and new customers highly secured end-to-end network security solutions, combining its integrated security expertise in telecommunication products with complementary services provided by Thales. In return, Thales will grow its business in cyber-security, further consolidating the knowledge and expertise of its teams, which is already world-class in this field.
Alcatel-Lucent’s cyber-security services and communications security activities are mainly located at three sites in France and in three other European countries.
Investors should not consider it a done deal, at least not yet. The partnership is subject to a final and definitive agreement. It will also not take place until the firms have consulted representative bodies, executed agreements and obtained necessary permissions.
Alcatel-Lucent further said:
Cyber-security is of strategic concern to our customers, and to networks in general. By partnering with Thales for related services, we will be able to offer a comprehensive world-class expertise in network security.
Investors may feel some confusion here. If advanced communications equipment is the goal, does getting rid of a cyber-security operation make sense? Sure, the company said it will work with Thales and has agreements with Qualcomm and Intel. Still, selling off a cyber-security operation in this day and age might not universally sound very reassuring.
Alcatel-Lucent ADSs were down by 1.8% at $3.82 in late day trading on Thursday in New York. Its 52-week range is $1.42 to $4.68.
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