French Government Weighs in on Nokia-Alcatel-Lucent Deal

By William Horobin 

PARIS--The French government weighed in on Nokia Corp.'s proposal to buy French rival Alcatel-Lucent SA on Tuesday, warning it will be watchful of the consequences for jobs and the telecoms sector in France.

"The government will be very vigilant regarding the possible consequences on employment and activity at the French sites of Alcatel-Lucent, notably in research and development, as well as the effects on the entire telecoms sector in France," the economy ministry said.

The French government has repeatedly intervened in international corporate deals in the past and last year bolstered its powers to do so. As General Electric Co. circled to buy most of France's engineering icon Alstom SA, the former economy ministry pushed through a decree to extend the government's powers to block deals. A 2005 law giving Paris powers over mergers in defense was extended to cover energy, transport, utilities, health and telecoms.

The economy ministry said Alcatel-Lucent holds a "structural position" in telecoms equipment and networks and described it as part of the country's telecom's "heritage."

"The government wants the details of the deal to be presented as quickly as possible," the economy ministry said.

While Paris has shown hostility to foreign takeovers in the past, the French government is also eager to see the emergence of European champions to rival Asia and the U.S. In that respect, the economy ministry said it wants more information to be able to judge whether the Nokia-Alcatel-Lucent deal would create a so-called Airbus of the telecommunications sector.

Write to William Horobin at [e-mail]

Access Investor Kit for Nokia Oyj

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=FI0009000681

Access Investor Kit for Alcatel-Lucent SA

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=FR0000130007

Access Investor Kit for Alstom SA

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=FR0010220475

Access Investor Kit for Alcatel-Lucent SA

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US0139043055

Access Investor Kit for Nokia Oyj

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US6549022043

Subscribe to WSJ: http://online.wsj.com?mod=djnwires