Thomson Multimedia and Alcatel have signed a Memorandum of Understanding (MoU) for the transfer of Alcatel’s DSL (Digital Subscriber Line) modem activity to Thomson.
Under the terms of the MoU, Thomson Multimedia will acquire Alcatel’s DSL modems activity in exchange for 9.5 million new shares of Thomson Multimedia. At the average share price of 48 euros per share, the transaction is valued at 456 million euros.
The final agreement will be submitted to the board of directors and the shareholders of Thomson Multimedia, to the representative bodies of Alcatel’s employees in the countries concerned, as well as to the relevant French and European authorities.
The transfer of the activity is expected to be finalised before the end of 2001.
DSL technologies are essential to the development of high-speed Internet access. Alcatel and Thomson multimedia believe in the sustained growth of this market and see DSL as key for the convergence of voice, data and video.
The agreement is in line with Alcatel’s strategic repositioning on the network infrastructure market, in particular on the DSL multiplexers (DSLAM) where Alcatel holds a 52% market share, according to Dell’Oro.
On the other hand, the DSL modems market is naturally bound to evolve toward a consumer industrial and commercial business model where Thomson multimedia has expertise.