Potential 'merger of equals' under consideration

Equipment vendors Alcatel and Lucent confirmed late last night that they are "engaged in discussions about a potential merger of equals that is intended to be priced at market".

The announcement follows a rash of rumours that hit the internet yesterday afternoon, placing a value of $33bn on a potential deal.

Some reports suggest that such an agreement would bolster Alcatel chief executive Serge Tchuruk's efforts to turn the company around by incorporating Lucent's product line. Lucent, meanwhile, has seen its sales dip over the past quarter.

"There can be no assurances that any agreement will be reached or that a transaction will be consummated. We will have no further comment until an agreement is reached or the discussions are terminated," the companies said in a joint statement.

Ethernet equipment vendor Riverstone Networks announced earlier this week that it is to be acquired by Lucent after the US vendor won an auction for the sale of Riverstone's business.

Lucent's final bid was $207m in cash, as well as certain modifications to the Asset Purchase Agreement originally signed by both parties on 7 February.