Loss-making Alcatel-Lucent dumps CEO and chairman

By Marcel Michelson and Astrid Wendlandt

PARIS (Reuters) - Alcatel-Lucent ousted its chairman and chief executive on Tuesday and cut its sales growth expectations yet again, which investors took as a sign the French-American group was continuing to lose market share.

The world's number one provider of fixed-line telecoms networks has seen its market value melt more than 60 percent since it started operating as a combined business in December 2006 following Alcatel's purchase of Lucent of the U.S.

Chief Executive Patricia Russo, who took the reins after the tie-up, will leave by year-end with a pay-off of up to 6 million euros ($9.45 million), while 70-year-old chairman Serge Tchuruk, architect of the merger, will leave on October 1.

"Serge and I think the company could benefit from new leadership ... I am committed to ensuring a smooth transition," Russo said in a conference call with analysts.

One person who has frequent contact with Tchuruk suggested he helped the board take the decision to replace Russo and fell on his sword in the process.

Over the past two years, the French press has reported the pair's recurring skirmishes, which Alcatel-Lucent consistently denied. Again on Tuesday, a spokeswoman denied Tchuruk orchestrated Russo's ouster.

"This was a decision that Serge and Pat made together and to speculate otherwise is totally inaccurate," she said.

The complexity of the controversial deal combined with a clash of corporate cultures and dire market conditions were partly to blame for the group's woes, analysts said.