Lucent Technologies Inc. on
Wednesday said it would spin off three slower-growing
businesses, forming an $8 billion independent company, as it
moves to focus on its fastest-growing operations following a
recent earnings letdown.
Lucent, the world's largest maker of
telecommunications equipment, said the spin-off would include
its company switchboard, or PBX, operations; Systimax, which
makes cabling systems for corporate campuses; and its local-area
network, or LAN-based, data business.
The new company, to be named later, will start out with $8
billion in annual revenues and a client list chock full of the
largest U.S. companies, Lucent said.
Lucent named its chief financial officer, Don Peterson, as
chief executive officer of the new company, and its former
chairman and current board member, Henry Schacht, as chairman of
"By spinning off our PBX, Systimax cabling and LAN-based
data businesses, we are sharpening Lucent's focus and creating
another leading company to serve business customers," Lucent
Chairman and Chief Executive Richard McGinn said.
A spin-off or divestiture of the slower-growing operations
had been expected; Lucent has been under pressure to return to
high growth after stumbling in the first quarter with a lower
profit and flat revenues.
The new company, with 34,000 employees worldwide, is
expected to record a one-time charge for restructuring purposes,
Lucent said. More details on the charge and restructuring were
not immediately available.
Shares of Lucent, the most widely held U.S. stock, closed
Tuesday at 59-1/2 on the New York Stock Exchange, but in
pre-open trading on Wednesday they were up 5-1/4 at 64-3/4.