House sets hearing on Alcatel/Lucent deal

Listen to this article

00:00
00:00

Top officials at Alcatel and Lucent, the French and US telecommunications equipment manufacturers, will be called before lawmakers on Capitol Hill next week to answer questions about the merger deal’s national security implications.

Duncan Hunter, Republican chairman of the House armed services committee, said he had scheduled the hearing, which will include testimony from Bush administration officials who are reviewing the deal, to discern whether it would undermine US national security interests.

While it is far from clear whether Mr Hunter’s interest in the deal could lead to wider scrutiny, or a backlash such as that against Dubai Ports World’s failed takeover of five port terminals this year, the development will put pressure on the transaction and White House officials.

The $10.6bn merger is in the last stages of an investigation by the Committee on Foreign Investment in the US, or Cfius, the inter-agency panel that vets foreign takeovers.

The companies tried early on to pre-empt congressional concerns about the deal by launching a lobbying campaign and by submitting a plan to fence off Lucent’s sensitive government contracts from Alcatel’s business through the creation of a subsidiary that would be overseen by three Clinton administration defence and intelligence officials.

Mr Hunter, who will be relegated to minority status in the House once Democrats take over next year, has been a frequent critic of foreign transactions and has said he has “grave concerns” over the deal.

Cfius experts said the ultimate test of whether the deal would face real trouble was not Mr Hunter’s opposition, but whether other more moderate lawmakers would join him.

Congress has since the ports debacle markedly softened its tone on the debate over foreign deals and, so far, has failed to to pass legislation that would make the Cfius process more onerous.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.