Nokia has officially announced it is ‘combining’ with Alcatel-Lucent to create an innovation leader in next generation technology and services for an IP connected world. The Finland based coy will acqure the France based company in an all-share transaction which will amount to €15.6 Billion.
According to the press release, the public exchange offer would see Alcatel-Lucent shareholders owning around 33.5% of the company and Nokia shareholders the remaining 66.5%.
The proposed deal has been approved by both company’s Board of Directors but is subject to approval by Nokia’s shareholders, regulatory bodies and others. The deal if fully approved is expected to close by the first half of 2016.
Commenting on the acquisition, President and CEO of Nokia, Rajeev Suri said:
“Together, Alcatel-Lucent and Nokia intend to lead in next generation network technology and services, with the scope to create seamless connectivity for people and things wherever they are.
Our innovation capability will be extraordinary, bringing together the R&D engine of Nokia with that of Alcatel-Lucent and its iconic Bell Labs. We will continue to combine this strength with the highly efficient, lean operations needed to compete on a global scale.
We have hugely complementary technologies and the comprehensive portfolio necessary to enable the internet of things and transition to the cloud. We will have a strong presence in every part of the world, including leading positions in the United States and China.
Together, we expect to have the scale to lead in every area in which we choose to compete, drive profitable growth, meet the needs of global customers, develop new technologies, build on our successful intellectual property licensing, and create value for our shareholders.
For all these reasons, I firmly believe that this is the right deal, with the right logic, at the right time.”
Micheal Combes, CEO of Alcatel-Lucent also added:
“
A combination of Nokia and Alcatel-Lucent will offer a unique opportunity to create a European champion and global leader in ultra- broadband, IP networking and cloud applications.
I am proud that the joined forces of Nokia and Alcatel-Lucent are ready to accelerate our strategic vision, giving us the financial strength and critical scale needed to achieve our transformation and invest in and develop the next generation of network technology.
This transaction comes at the right time to strengthen the European technology industry. We believe our customers will benefit from our improved innovation capability and incomparable R&D engine under the Bell Labs brand. The global scale and footprint of the new company will reinforce it’s presence in the United States and China.
The proposed transaction represents a compelling offer for our shareholders both in terms of upfront premium and long term value creation potential. Shareholders of Alcatel-Lucent now have the opportunity to participate in the future upside of the industrial project that they have supported during the last two years, through a stronger combined business with greater global scale and a better position for the longer term. The new company will also provide our employees exciting opportunities to be part of a global leader.”
The Company would be called Nokia Corporations with it’s headquarters would still be based in Finland and a very strong presence in France. Current Chairman Risto Siilasmaa will keep his position, Rajeev Suri as CEO but the combined company’s Board of Directors would have 9 – 10 members which three coming from Alcatel-Lucent and one of whom will serve as Vice Chairman.
In another news, Nokia has also touched on the issue of the sales of its HERE maps division. The company claims ‘it has initiated a review of strategic options for its HERE business. That review is ongoing, it may or may not lead to a transaction, and any further announcements about HERE will be made in due course, as appropriate’.
Source: Nokia Press Release
