Alcatel-Lucent names new CEO and chairman

By Dominique Vidalon

PARIS (Reuters) - Alcatel-Lucent (ALUA.PA) named its new leadership on Tuesday, handing the task of turning round the loss-making telecoms equipment group to former British Telecom (BT.L) chief executive and industry veteran Ben Verwaayen.

The appointment of Verwaayen as chief executive, coupled with the hiring of French business grandee Philippe Camus as non-executive chairman, comes a month after investors forced the current managers out following a series of profit warnings.

The world's biggest provider of fixed-line telecoms networks, which has been losing market share amid a tough market and fierce competition from key rivals such as Ericsson (ERICb.ST), has seen its market value drop more than 60 percent in the 21 months since Alcatel and Lucent merged.

The company said Camus, 60, a senior partner at French media group Lagardere (LAGA.PA), would replace Serge Tchuruk as of October 1, while Verwaayen, 56, would take over as chief executive replacing Patricia Russo.

Camus will keep his position at Lagardere, the company said.

Investors have been pushing hard for many months to get rid of Russo and Tchuruk and the stock has regained 30 percent since their departures were announced. But it remains 60 percent below its December 2006 level.

By 6:32 a.m. EDT the shares were down 1.9 percent at 4.225 euros, off an earlier low of 4.06 euros and giving the company a market capitalization of around 10 billion euros ($14.5 billion), as some investors pocketed their profits.

"The appointment comes quicker than the market had expected. The stock has recently been rising on hopes of a new management team capable of a turnaround. Now that the announcement has been made, there is no more (price) catalyst" one trader said.

"The board reacted swiftly. They found a CEO who has a good international experience and in the telecoms sector," said Exane BNP Paribas analyst Alexander Peterc.

"Camus will be a truly non-executive chairman, so conflicts seen in the past are more unlikely to repeat themselves," he added.

Camus, a French national and now a U.S. resident as a partner at New York investment firm Evercore Partners (EVR.N), is best known as an architect and founding co-chief executive of European aerospace group EADS, serving between 2002 and 2005. He is co-managing partner of French media group Lagardere, a major shareholder in EADS.

PROBLEMS

The complexity of the controversial transatlantic merger deal, a clash of corporate cultures and dire market conditions were partly to blame for Alcatel-Lucent's woes, analysts have said.

Alcatel-Lucent also took too long to select its combined technology portfolio, spooking customers, while management, which lost key people after the merger, struggled to remain focused, they say.

Verwaayen, a Dutch national, has extensive experience in the telecoms industry and the problems at Alcatel-Lucent will be familiar to him.