Wednesday 26 October 2016

Nokia in advanced talks to acquire French rival Alcatel

Published 14/04/2015 | 08:49

The Nokia XL is seen at its unveiling at the Mobile World Congress in Barcelona, February 24, 2014.
The Nokia XL is seen at its unveiling at the Mobile World Congress in Barcelona, February 24, 2014.

Nokia Oyj is in talks to buy Alcatel-Lucent, the companies said in a statement today.

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Finland's Nokia Oyj is close to a deal to buy Alcatel-Lucent's mobile networks unit to boost its core business especially in the United States and China, Les Echos newspaper reported yesterday.

The French business daily said an announcement could come "quickly," citing a source close to the matter. The paper said meetings between managers at the two companies had increased since January.

In a joint announcement, the two companies said "there can be no certainty at this stage that these discussions will result in any agreement or transaction."

Bloomberg reported later on Monday that the companies had examined a full takeover of Paris-based telecom equipment maker Alcatel, but that Nokia was more likely to buy the wireless business.

The unit generated sales of €4.7bn euros last year, or about one-third of the group total, Les Echos said.

The newspaper added that any deal would be closely watched by French politicians, as Alcatel was considered a strategic business.

The French economy ministry declined to comment.

A source familiar with the matter said on Friday that Nokia was considering selling its HERE maps business, which last year had net sales of around €969m.

Analysts have seen little synergy between the unit and Nokia's mainstay network gear business, and Nokia has hired a financial adviser to explore a sale, the source said.

Shares of Nokia and Alcatel rose on Monday as analysts welcomed a possible sale of the Nokia unit as a likely precursor to consolidation of Alcatel's wireless business.

Alcatel and Nokia had held sporadic talks for years before the Finnish company sold its struggling handset business to Microsoft Corp a year ago, leaving Nokia to concentrate on developing the networks business.

Germany's Manager Magazin reported in December that the two companies had revived talks on a possible merger.

Alcatel Chief Executive Michel Combes has voiced confidence in his goal of achieving positive free cash flow by the end of this year.

Combes has pursued an aggressive restructuring plan including layoffs of 10,000 employees, sales of assets worth about €600m, and increasing capital by €1bn to shore up finances.


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