Nokia takes control of Alcatel, to act fast on combining operations
05 January 2016
Finnish company Nokia said yesterday that it had gained control of French counterpart Alcatel-Lucent following its €15.6-billion ($17 billion) all-share offer and the two telecom equipment makers would start combining their operations next week.
With the Alcatel acquisition, Nokia would find itself in a stronger position to compete with Sweden's Ericsson and China's Huawei in a market for telecom network gear where prices are under pressure with limited growth and increasing competition.
According to the French stock market authority, interim results from the offer showed Nokia would hold around 79 per cent of Alcatel shares.
Nokia said it would move fast to press ahead with the integration. The formal closure of the deal, expected during the first quarter.
"As of January 14, 2016, Nokia and Alcatel-Lucent will offer a combined end-to-end portfolio of the scope and scale to meet the needs of our global customers," Nokia chief executive Rajeev Suri said.
He added, "We will have unparalleled R&D and innovation capabilities, which we will use to lead the world in creating next-generation technology and services."
"They are well on track with this deal, it seems they have calculated the deal's 'margins of safety' rather carefully. Now, they can keep up a positive news flow," said Jukka Oksaharju, strategist at Nordnet brokerage, Reuters reported.
Nokia, a former phone-making giant, will hold 79-per cent of shares in Alcatel-Lucent, sharpening its bid to become a major global tech player once more.
Absorbing Alcatel, which operates in 130 countries, will help it go up against network equipment leaders Ericsson of Sweden and China-based Huawei.
Like Ericsson, the Nokia name was once emblazoned across many of our phones. That's no longer the case, but both companies continue to play a vital role in supplying and running the hardware and software that make it possible for us to use the Internet every day.
The Alcatel merger, which had earlier received the approval from US and European antitrust regulators, would help Nokia build up its networks division, however that would not mean it was abandoning its past forms of revenue completely.
The company is still working on creating and licensing new gadget technology, such as the Ozo virtual-reality camera and the Nokia N1 Android tablet that were both unveiled in 2015.