COVID-19 Latest
World|business|April 15, 2015 / 02:58 PM
Nokia to buy Alcatel-Lucent to grow in telecom equipment

AKIPRESS.COM - Nokia is to buy Alcatel-Lucent in an all-share deal that values its smaller French rival at 15.6 billion euros ($16.6 billion), building up its telecom equipment business to compete with market leader Ericsson, reports Reuters.

Nokia's takeover of Alcatel-Lucent will redefine a telecom equipment sector suffering weak growth prospects and pressure from low-cost Chinese players Huawei [HWT.UL] and ZTE.

The combined company will have about 114,000 employees and combined sales of around 26 billion euros. In mobile equipment it will rank a strong second, with global market share of 35 percent, behind Sweden's Ericsson with 40 percent and ahead of Huawei's 20 percent, according to Bernstein Research.

The Finnish company will give Alcatel-Lucent shareholders 0.55 shares in the combined company for each of their old shares, resulting in 33.5 percent of the entity being in Alcatel shareholders' hands if the tender offer is fully taken up.

The deal will be finalised in the first half of 2016 and is expected to result in 900 million euros of operating cost savings by the end of 2019, the companies said on Wednesday.

The new Nokia will have stronger exposure to the important North American market, with key contracts with AT&T and Verizon and a fast-growing Internet routing business.

Nokia shares rose 3 percent at the opening, while Alcatel-Lucent fell 11 percent, reversing trends on Tuesday when the talks were first acknowledged by the companies.

Alcatel shareholders were disappointed because they hoped for a part-cash offer, while Nokia holders were relieved that the group had not overpaid, a trader said.

All rights reserved

© AKIpress News Agency - 2001-2024.

Republication of any material is prohibited without a written agreement with AKIpress News Agency.

Any citation must be accompanied by a hyperlink to akipress.com.

Our address:

299/5 Chingiz Aitmatov Prosp., Bishkek, the Kyrgyz Republic

e-mail: english@akipress.org, akipressenglish@gmail.com;

Follow us:

Log in


Forgot your password? - recover

Not registered yet? - sign-up

Sign-up

I have an account - log in

Password recovery

I have an account - log in