14 DAY TRIAL // After news related to Nokia’s discussions with French company Alcatel-Lucent made rounds online a few days ago, the Finnish tech giant stepped forward and made an official statement revealing that two companies were indeed involved in negotiation procedures.
Even if yesterday Nokia claimed the outcome of these talks was still to be determined, today we receive news that the Finnish company has actually acquired the French telecom equipment maker Alcatel-Lucent for over €15.6 billion ($16.6 billion).
Following the purchase, Nokia will give Alcatel-Lucent shareholders 0.55 shares in the combined company for each of their old share. This will result in Alcatel holding dominion of 33.5% of the entity, while Nokia will take hold of 66.5% if the public exchange offer goes through completely.
Nokia wants to become the world's largest networking equipment maker
The deal will be finalized in the first half of 2016. The acquisition will help Nokia push its ambitions of becoming a major provider of networking equipment ever further. The Finnish company will continue to compete with market leader Ericsson, but things are moving into the right direction for Nokia.
The French telecommunications equipment company is expected to start using the Nokia brand, but to retain Alcatel-Lucent’s Bell Labs name for its R&D purposes.
“With more than 40 000 R&D employees and spend of EUR 4.7 billion in R&D in 2014, the combined company will be in a position to accelerate development of future technologies including 5G, IP and software-defined networking, cloud, analytics as well as sensors and imaging,” explained Nokia in its official statement.
As you probably know, Nokia sold its once dominant smartphone business last year to Microsoft after failing to compete with industry giants like Apple and Samsung. The deal left it with the network unit, a smaller map unit, and a host of technology patents, and the company is planning to make the most of them.
Speaking of the map unit, Nokia has also said that it is in the process of reviewing its HERE Mapping business and is considering selling it off, just as we were told a week ago. The review is ongoing, and according to the company, it may or may not result in any transaction. We’ll just have to wait and see.