French telecoms equipment maker Alcatel is in advanced talks to buy Lucent Technologies for slightly more than $40 billion, the New York Timesreported in its online edition today.
Citing executives close to the talks, the paper said the talks, which have been going on for a month, have reached a crucial stage and a decision about whether to proceed with formal negotiations is expected within the next week.
In Paris, Alcatel declined comment on the report.
If the companies decide to move forward, a deal could be announced by early June, the paper said, and executives described the odds of the deal happening at "50-50".
The companies are discussing a nearly all-stock transaction, representing about a 20 percent premium over Lucent's current value of $33.5 billion, the paper said.
Lucent is hoping to portray the deal as a merger of equals, the paper said, but Alcatel would be the buyer, although Alcatel, which is valued at $39.5 billion, is not much bigger than Lucent.
Alcatel's main objective in acquiring Lucent would be to advance its ambitions in the United States, the paper noted.
Lucent and its rivals Nortel Networks and Cisco Systems dominate the industry, but the share prices of the three companies have been falling, the report noted.
Shares of Lucent closed yesterday at $9.81 per share, off a 52-week high of $67.19, up from a year low of $5.50 per share.