14 DAY TRIAL // Having finished the sale of its Devices and Services business to Microsoft, Nokia is now sitting on a big pile of cash, which is not used for anything at the moment.
Nokia has confirmed that the transaction completed last month with Microsoft bringing in its coffers with slightly more than €5.44 billion ($7.17 billion), the initial amount announced last year.
The Finnish company's newly appointed CEO Rajeej Suri, previously head of Nokia Solutions and Networks since 2009, has announced that most of the revenues of what's left from Nokia's businesses comes from NSN (Nokia Solutions and Nokia Networks).
It appears that Nokia plans to strengthen its presence on the network infrastructure market even more with a new acquisition. According to sources in the market, Nokia eyed French-American giant Alcatel-Lucent, which had a couple of rough years lately.
A Romanian blog cites French publication LesEchos, which claims that an anonymous trader based in London said that “Nokia could bid for Alcatel using its cash transaction with Microsoft.”
Another trader based in Amsterdam confirmed the previous statement and said that Nokia could offer up to €4.10 per share. As soon as these rumors reached Paris Stock Exchange earlier this morning, Alcatel's stock climbed 4.17%, the largest in a very long time.
Alcatel-Lucent's acquisition by Nokia makes perfect sense if we take into consideration that there is only a handful of players on the network infrastructure market and Alcatel is the only one suffering huge losses.
As a matter fact, the French-American company reported losses of more than €3 billion ($4.177 billion). Only last year the telecommunication giant had to let go no less than 10,000 people from all its offices across the globe. The bottom line is that Alcatel-Lucent is in deep trouble and a takeover will probably be a good idea for both companies.
With Alcatel-Lucent, Nokia Networks will be much more competitive on the telecommunication market, where Chinese companies like Huawei and ZTE have become a major threat for Ericsson, Nokia and Alcatel.
By acquiring one of the major players in the network infrastructure market, the Finnish company eliminates one of its main rivals.
Unfortunately, for the time being, both companies (Nokia and Alcatel) have refused to comment on these rumors, so take it with a grain of salt until the transaction is made official, or denied.
We will keep an eye out for any additional details on these unconfirmed rumors, so stay tuned for more updates on the matter.