PARIS (Reuters) - Shareholders at Alcatel (CGEP.PA) and Lucent Technologies Inc. (NYSE:LU - news) on Thursday separately voted in favor of a merger under which the French telecoms equipment firm buys its U.S. rival in a $10.9 billion deal.
The approval puts to rest a weeks-long debate about the merits of the deal aimed at extending the two companies' footprint in an increasingly competitive global market.
Alcatel Chief Executive Serge Tchuruk said: "I am delighted that Alcatel's shareholders have approved our strategic merger with Lucent Technologies, and I thank them for their trust."
The overwhelming votes in favor followed pressure from some investors, led by French investment advisory firm Proxinvest, to block the all-share deal because they feared Alcatel was overpaying for Lucent.
"There was no premium involved. It was simply a merger of equals," said analyst Inder Singh at Prudential Equity Group.
"Sure, there were concerns about Lucent's pension and retirement plans. But those were well understood."
The merger will turn the pair into one of the world's leading suppliers of network hardware and software for mobile communications, high-speed Internet and TV broadcasting over ADSL phone lines.
Earlier this month, Alcatel signed a preliminary agreement to buy Nortel's (Toronto:NT.TO - news) third-generation UMTS cell phone network unit for $320 million which, together with Lucent, will turn the trio into the world's third-largest provider of UMTS networks.
This year, rival Siemens (SIEGn.DE) joined forces with Nokia (NOK1V.HE) and giant Ericsson (ERICb.ST) completed the acquisition of Marconi's network equipment assets.
Alcatel is offering Lucent shareholders 0.1952 of an Alcatel share for every Lucent share they own, valuing each Alcatel share at about five Lucent shares.
Tchuruk extolled the merits of the merger for more than an hour, without using notes, in a speech delivered with his traditional mix of authority and charm.
"The merger with Lucent addresses challenges in innovation, costs and access to market," Tchuruk said.
He reminded shareholders that the deal would add to earnings for Alcatel from the first year.
Tchuruk said the merger had been warmly welcomed by customers and would give a significant boost to the company's research and development.
"Consolidation is necessary. I will vote yes because there is a limit to the consumption of technology by an individual," said shareholder, Alain Finot, 58, financial adviser from the northern city of Lille.
"I will vote yes because I believe in the future of this company," said one elderly shareholders.
Alcatel shares closed 1.6 percent lower at 9.43 euros.
Lucent and Alcatel's shares have lost more than 25 percent since they announced the merger proposal in early April.
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