Lucent and Alcatel put an end to the rumors yesterday and announced their intentions to merge to form a $25 billion telecom giant. The combined company will be headquartered in Paris and Patricia Russo, chairman and CEO of Lucent, will become CEO of the new company.

Although the press release calls it a “merger of equals,” Mark Evans points out that “unofficially Alcatel is buying Lucent given its shareholders will have 60% of the new entity.” Om Malik agrees, “This is not really a merger of equals, and if you read the terms of the deal, its Alcatel swallowing Lucent.”

The combined company will reduce its workforce by 10%, eliminating 8,800 jobs. Although its been expected for awhile, there are some concerns being voiced about the deal. According to Mark Evans, RBC World Markets’ analyst Mark Sue believes that Lucent and Alcatel have distinctly different corporate cultures, which could impede any expected synergies for at least a year. Cynthia Brumfield on IP Democracy points out that there could also be problems with the French incorporation and high level of French government ownership of the new company as it pertains to Lucent’s Bell Labs, which has long been involved in super secret military research for the U.S. government.