Alcatel sells enterprise division for $290m

Telecommunications equipment giant Alcatel-Lucent has offloaded its enterprise division to a Chinese investment firm for €202 million (A$290 million), retaining a minority stake in the newly-formed separate holding company.

Alcatel will keep a 15 percent share of the new Paris-based Alcatel-Lucent Enterprise company after selling 85 percent to China Huaxin Post & Telecommunication Economy Development Center. The deal was initiated earlier this year.

The division - which builds enterprise communication and networking for businesses - currently counts around 2700 worldwide employees and operations in over 80 countries.

Alcatel-Lucent will continue to work with the new company on a "privileged business relationship basis".

The sale forms part of Alcatel-Lucent’s 'shift plan', which was launched in June last year. It targets over €1 billion in asset sales and the same amount in cost savings, and aims to refocus the company as an IP networking and ultra-broadband specialist.

The divestment marks the second time Alcatel has explored the sale of the division - which has long been rumoured to be underperforming - in three years. Alcatel does not report the division's earnings.

It attempted to offload the business in 2011 to no avail, and ended up selling its call centre software unit Genesys to private equity firm Permira for US$1.5 billion instead.