GEC and Alcatel in merger rumour

NEWS GEC is seriously considering a full merger with French telecoms manufacturer Alcatel according to reports in the Sunday Times. The companies have had two months of discussions on how to work together. The move is believed to include Alcatel buying GEC's telecoms hardware arm. It now appears that the two have decided on a full merger. This would give the combined company a turnover in excess of £30bn a year. Neither company was prepared to talk about the deal. A spokesman for GEC said: "We never comment on market rumours." Apart from its telecoms hardware and Internet businesses, Alcatel also has a stake in Thomson-CSF - a defence-electronics business. The French company also bought Packet Engines, a US gigabit Ethernet company headed by Bernard Daines, in October of this year. A deciding factor is likely to be the opinion of GEC's new chairman - Sir Roger Hurns joins the company on Tuesday.