Saturday 22 July 2017

Nokia buys Alcatel-Lucent for €15.6bn

Nokia Oyj is in talks to buy smaller telecom equipment maker Alcatel-Lucent, a deal that would combine the industry's two weakest players but could pose challenges in cutting costs and overcoming political opposition. Photo: Reuters
Nokia Oyj is in talks to buy smaller telecom equipment maker Alcatel-Lucent, a deal that would combine the industry's two weakest players but could pose challenges in cutting costs and overcoming political opposition. Photo: Reuters

FINNISH telecom network equipment maker Nokia has agreed to buy Alcatel-Lucent in an all-share transaction that values its smaller French rival at €15.6bn.

Nokia 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's hands and Nokia having 66.5pc if the public exchange offer is fully taken up.

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

Nokia pledged to keep France as "a vibrant center of the combined company" and not to cut jobs beyond what Alcatel had already planned, especially protecting research and development sites at Villarceaux and Lannion.

Alcatel-Lucent has some 6,000 employees in France. Maintaining jobs was a key demand of the French state for its backing of the deal.

Reuters

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