By William Horobin and Ruth Bender
PARIS--The French government, which has long played spoiler to
some of Europe's biggest corporate deals, is rolling out the
welcome mat for Nokia Corp.'s proposal to buy Alcatel-Lucent
SA.
The warm reception is a sign of how badly Alcatel, besieged by
Asian and European rivals, needs a stronger partner to survive,
even one with a foreign passport.
Within hours of the plans being made public, French President
François Hollande was meeting with the chief executives of both
companies--Nokia's Rajeev Suri and Alcatel-Lucent's Michel
Combes--inside the Élysée Palace.
"It's a big champion that could compete with Huawei and Chinese
champions," Economy Minister Emmanuel Macron said in the courtyard
of the Élysée Palace after the meeting. "For a Europe that believes
in its digital sovereignty and for a Europe that wants to conquer
new markets."
Successive French governments have sought to nurture domestic
industrial champions capable of competing in the global arena,
often stepping in to keep foreign buyers at bay. Earlier this
month, the French government ordered partially state-owned telecoms
operator Orange SA to find a European owner for its video-streaming
unit Dailymotion even after it was in advanced talks with a Hong
Kong investor. Days later, Orange said it had found an interested
buyer in Vivendi SA, the French media conglomerate.
But France is increasingly straining to maintain control over
its roster of champions. In the past year, General Electric Co. has
bought the energy assets of Alstom SA, while Holcim Ltd. is in the
process of buying French cement giant Lafarge SA.
Constrained by European Union rules limiting state aid and its
own beleaguered finances, the French government has reduced its
margin to block foreign bidders while supporting national
companies.
Analysts said there was little the government could do to help
Alcatel-Lucent--born out of a 2006 Franco-U.S. marriage that
inherited France's postwar prowess in telecoms but yielded years of
losses.
"It is a case of predators and prey," said Élie Cohen, economist
at France's national research center CNRS. "In this case the prey
is very weak."
Still, the French government said it will be lobbying hard to
save jobs, particularly in research and development.
Officials from the Economy Ministry have been holding meetings
with the companies for months to pressure for the best outcome in
terms of jobs and business in France, one official said.
French government officials also promoted the possible merger as
one that would help create "an Airbus" of telecommunications
equipment, referring to the successful pan-European aircraft
maker.
"I think it is important we are able to accompany the emergence
of this new champion," Mr. Macron said after the Élysée
meeting.
Write to William Horobin at William.Horobin@wsj.com and Ruth
Bender at Ruth.Bender@wsj.com
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