Lucent Technologies to Spin Off Enterprise Networking Business

Lucent Technologieseparate company that will focus directly on the enterprise networking market, telecommunications equipment maker <%=company%> (Murray Hill, NJ) plans to spin off its PBX, Systimax structured cabling, and LAN-based data businesses. The new company, to be named at a later date, will start out with an $8 billion business and a customer list that includes more than 90% of Fortune 500 companies, according to Lucent.

The spinoff, which was approved by Lucent's board of directors, is expected to be accomplished through a tax-free distribution of shares to Lucent's shareowners. Lucent anticipates the spinoff should be completed by the close of its fourth fiscal quarter of 2000, which ends Sept. 30.

Lucent's enterprise business is growing faster than most of its key markets, including voice, messaging and call center businesses. The new enterprise business will maintain all of its customer relationships and partnerships, and it will have approximately 34,000 employees worldwide. It is anticipated that the new enterprise company will take a one-time charge for restructuring expenses.

Lucent to focus on optical networking, Internet
"With this move, Lucent will focus on extending its leadership in the highest growth areas of communications networking," said Lucent Technologies Chairman and CEO Richard McGinn in a statement. "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 will concentrate greater resources on fast-growing areas like optical networking, Internet infrastructure, wireless, semiconductors, optoelectronics, Web-based enterprise solutions linking private to public networks, and professional design and consulting services for service providers and enterprises," McGinn continued.

McGinn announced that Donald Peterson, currently Lucent executive vice president and chief financial officer, will become president and CEO of the new company. Henry Schacht, former Lucent chairman and a current member of the board of directors, will become chairman of the new company.

After the spinoff, each company will have its own brand, board of directors and R&D organizations. "We are embarking on the creation of a brand new company and we are excited about the opportunity ahead of us," said Peterson. "Serving our customers flawlessly will remain our top priority throughout this transition and drive our actions."

Edited by John Spofford