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ALCATEL PARTNERS WITH DSC OF U.S.

Alcatel Telecom will acquire U.S.-based DSC Communications Corp. in a stock-for-stock transaction, according to a definitive agreement announced by the companies.

The deal is thought to give Paris-based Alcatel a much-desired expanded presence in North America that will allow it to better compete with Northern Telecom Ltd. and Lucent Technologies Inc.

Terms of the agreement, which has been approved by each company’s board of directors, call for DSC shareholders to receive .815 of an Alcatel American Depository Share for each outstanding DSC share. The transaction is valued at about US$4 billion.

Dallas-based DSC provides digital switching, transmission, access and network management systems. DSC supplies switches to Motorola Inc.

Alcatel supplies products and services ranging from backbone networks to user terminals.

The combined company will be headquartered in Texas. The transaction is expected to close in about four months.

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