WASHINGTON (AP) – President Bush has approved the proposed $11.8 billion takeover of Lucent Technologies Inc. by French-owned Alcatel, saying the merger of the two telecommunications equipment companies does not present any major national security concerns.

White House press secretary Tony Snow, traveling with Bush in Hanoi, Vietnam, said Friday night the president agreed with the recommendation of the Committee on Foreign Investment in the United States, or CFIUS, to allow the deal to go through, removing the last major regulatory hurdle to the combination of the two companies.

The merged company will become one of the world’s largest telecommunications equipment suppliers, generating about $25 billion in sales and accounting for about an 18 percent share of the market. The combined company will trim about 9,000 jobs, saving $1.8 billion over three years.

Snow said Alcatel and Lucent agreed with U.S. government agencies to enter into “robust and far-reaching agreements designed to ensure the protection of our national security.”

The merger required the approval of the foreign investment council due to Lucent’s work on sensitive government contracts.

“The president’s decision demonstrates the commitment of the United States to protect its national security interests and maintain its openness to investment, including investment from overseas, which is vital to continued economic growth, job creation, and an ever-stronger nation,” Snow said in a statement.

Lucent is the parent of Bell Labs, the legendary research organization that has generated more than 31,000 patents since 1925 and is credited with inventing the transistor. Lucent is headquartered in Murray Hill, N.J., and employs about 29,800 people worldwide. Lucent Chief Executive Officer Patricia Russo will run the new company from Paris, where Alcatel is based.

Alcatel employs 58,000 people and operates in more than 130 countries. Alcatel CEO Serge Tchuruk will act as chairman.

In a joint statement Friday night, the companies said they are “moving quickly to finalize the transaction” and expect to complete the merger on Nov. 30.

Lucent shares closed slightly higher Friday, up a penny to $2.62 on the New York Stock Exchange while Alcatel shares fell 8 cents to $13.50.


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