Nokia to buy Alcatel-Lucent, may sell Here mapping business

The combined company will be called Nokia and have its headquarters in Finland

Nokia has said it has entered into a memorandum of understanding to acquire Alcatel-Lucent in a deal that would value the French telecommunications equipment maker at €15.6 billion (US$16.5 billion).

The Finnish company is also considering a possible divestment from its Here mapping and navigation business.

On Tuesday, Nokia said it was in talks for a merger with Alcatel-Lucent. Under the all-share deal announced Wednesday, Nokia will make an offer for all of the equity securities issued by Alcatel-Lucent, through a public exchange offer in France and the U.S., on the basis of 0.55 of a new Nokia share for every Alcatel-Lucent share.

After the transaction, Nokia shareholders will hold 66.5 percent of the equity of the combined company, while Alcatel-Lucent investors will hold 33.5 percent.

The combined company will be called Nokia Corporation and have its headquarters in Finland and a strong presence in France, which will have some key business locations and research and development centers. Current Nokia CEO Rajeev Suri is expected to continue in this position in the combined company, while Risto Siilasmaa, current chairman at Nokia, will also remain in the post. The boards of both companies have agreed on the merger, which is expected to be completed by the first half of next year.

Alcatel-Lucent and Nokia have complementary portfolios and geographies, with strengths in the U.S., China, Europe and Asia-Pacific, the companies said. The new entity hopes to combine the best of fixed and mobile broadband, IP routing, core networks, cloud applications and services. The business is expected to operate under the Nokia brand, while retaining Alcatel-Lucent's Bell Labs brand for its networks-focused innovation activities.

The expanded company had net sales of nearly €26 billion in fiscal year 2014, giving it the scale after the merger to better compete with top-tier players Huawei Technologies and Ericsson.

A deal would combine Nokia's focus on the mobile equipment business with Alcatel-Lucent's business in fixed networks, which would be an advantage as mobile and fixed networks become increasingly integrated, research firm Ovum said Tuesday, after the companies announced talks. There are, however, overlaps in the companies' product lines in areas such as mobile broadband and small cells, said Mark Newman, chief research officer at Ovum's telecoms research business.

Keeping two parallel product lines and servicing customers would counteract the benefits of increased scale, but attempts at rationalization would be difficult, and dealing with French labor laws could place limitations on what Nokia can achieve in this area, Newman said.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Mergers and acquisitionsNokiabusiness issuestelecommunicationalcatel-lucent

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Father’s Day Gift Guide

Brand Post

Bitdefender 2019

Bitdefender solutions stop attacks before they even begin! Get cybersecurity that 500 MILLION users already have and trust.

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?