The acquisition, if completed, would make Alcatel the world's second largest producer of optical fibre. Presently, Corning has an estimated 35 percent to 50 percent of the market, Lucent has about half that, and Alcatel has an estimated 10 percent, said UBS Warburg analyst Joseph Wolf. Loan Pricing Corp. The loan will be Alcatel's first major syndicated credit as the company has previously relied on bilateral bonds and short-term commercial paper. On the fibre optic deal, bankers also warned that Alcatel could face competition. So is Corning, but its market share would be too large and JDS Uniphase might have trouble raising the cash,'' a banker told LPC, the syndicated loans unit of Reuters.
Bankers expect the sale to be concluded in two to three weeks.
Meanwhile, analysts and traders dismissed the likelihood and logic of a merger between the two groups. Doing a deal could raise a host of issues that may prove too difficult to resolve. It would get U.S. market share but a lot of rubbish along with it which would be a shame as Alcatel has done a great job restructuring itself,'' said a London-based analyst. Paris-based analysts were also skeptical. Still, the possibility of the two merging is more feasible now than a year ago given the sharp slowdown in the global telecoms industry.