Nokia pays $16.6 billion for Alcatel-Lucent

Nokia pays $16.6 billion for Alcatel-Lucent
The deal that Nokia said yesterday that it was hard at work on is now official. After two years of discussions, Nokia and Alcatel-Lucent have shaken hands on a $16.6 billion transaction that will combine two of the smallest network equipment firms in Europe. As we noted yesterday, the new company will now be better equipped (no pun intended) to take on industry leader Ericsson and other leading firms like Huawei.

Nokia will give each Alcatel-Lucent stockholder .55 of a Nokia share. That works out to a value of $4.32 for each Alcatel-Lucent share. When the deal closes in the first half of 2016, Alcatel-Lucent stockholders will own 35% of the combined company. Nokia will continue to remain based in Finland under the care of Chairman Risto Siilasmaa and Chief Executive Rajeev Suri. Obviously, there will be some strong ties to France where Alcatel-Lucent is now headquartered. And a vice chairman will be selected from the latter company.

Nokia said that as a result of the deal, it will look to sell some assets including the highly regarded HERE maps business. Rumors that HERE was being shopped started to circulate last week. A combined Nokia-Alcatel-Lucent immediately becomes a competitor to Ericsson, which has the largest market share in the wireless network equipment industry at 40%. Nokia now jumps into the number two slot with 35% of the pie. Huawei, the low-cost leader, owns 20% of the market.

source: WSJ

Recommended Stories

Loading Comments...
FCC OKs Cingular\'s purchase of AT&T Wireless