Alcatel buys US data networking firm in $2bn deal

Alcatel buys US data networking firm in $2bn deal
Richard Wilson
French telecoms group Alcatel has bought Xylan, the US data switching system supplier in a $2bn deal which reflects the growing importance of Internet data traffic to traditional telecoms equipment suppliers.
It is the second transatlantic communications deal in as many days. On Monday GEC agreed to pay $2bn for US telecoms access system supplier Reltec.
Unlike the GEC/Reltec deal, Alcatel’s acquisition of Xylan is the latest move in a trend where traditional telecoms equipment suppliers are meeting the new demands of the Internet market by buying data networking companies.
Two recent examples of this trend have been Lucent Technologies takeover of Ascend Communications, and Nortel’s acquisition of Bay Networks.
Last week, Siemens UK chief executive Alan Wood declined to comment on suggestions that Siemens was also looking to buy a data networking company. Rumours of Siemens’ interest in Newbridge Networks have been around for some time without any conformation.

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