Lucent latches onto LanNet in a $117m acquisition from Madge

Lucent has jumped on the voice and data convergence bandwagon with its $117m (#71.7m) acquisition of Madge Networks subsidiary, LanNet.

The move signals Lucent's intention to continue its expansion beyond the telephone equipment sector into the faster-growing data networking market.

"LanNet offers a portfolio of award-winning, highly reliable IP and ATM networking products that are complementary to our existing offerings," said Bill O'Shea, president of Lucent's data networking group. "It has a prestigious global customer base and strong sales channels, particularly in Europe, which is a critical growth area for Lucent," he added.

Israeli-based LanNet, with a staff of 500, specialises in Ethernet switches for Lans, and Ethernet and ATM backbone switches. It will be merged into Lucent's rapidly expanding Enterprise Infrastructure Products Group. Its new parent promised to expand LanNet's range of intelligent switches.

Richard McGinn, Lucent's chairman and CEO, recently stated his intention to move into the data market: "The issue for our customers is how to offer the same quality of service in the data world as we do in the voice world."

The move marks another milestone in the rapidly converging voice and data market. Lucent was believed to have set its sights on Bay Networks, but the legal fall-out from the AT&T demerger left the company's accounting procedures unable to accommodate a large-scale acquisition before September.

After Lucent was pipped at the post by Nortel in the Bay deal, industry analysts have been speculating furiously about the telecoms equipment giant's future shopping plans.

ACQUISITION TRAIL

- September 1996: Lucent formally separates from AT&T.

- October 1996: Buys Agile Networks for its Fast Ethernet backbone switch and its policy-based management software.

- July 1997: Buys Octel Communications for its unified fax, e-mail and voice range.

- October 1997: Buys Livingston Enterprises for remote access systems and Radius authentication technology.

- November 1997: Buys Prominet for its Gigabit Ethernet backbone switch.

- April 1998: Buys Yuries Systems for its ATM edge switch.

- July 1998: Buys LanNet from Madge.

Estimated war chest for acquisitions: $30bn.