Nokia Casts Longing Eyes At … Alcatel-Lucent?

The word this morning is that Finland-based Nokia is close to a blockbuster deal to buy the Franco-American giant Alcatel-Lucent. It’s not just an idle rumor, either, as the two companies have confirmed they are in advanced talks, and a deal would likely tip the scales at about $13B. 

That of course, assumes that France doesn’t object – the economic ministry wasted no time telling everyone just how vigilant they would be, weighing in on the rumor in a matter of hours:

“The government will be very vigilant regarding the possible consequences on employment and activity at the French sites of Alcatel-Lucent, notably in research and development, as well as the effects on the entire telecoms sector in France.”

But you can’t actually object until there’s a deal to object to, and that could fall through easily enough too. The merger of these two giants could significantly shake up the sector, and if it doesn’t fall through it will get a lot of regulatory attention.

Alcatel-Lucent has spent the better part of the last decade trying to streamline itself into a viable company, and over the last couple of years they have finally found some success. Of course, the company is rather smaller now, having sold off various non-core assets and laid off a whole lot of people.  The company’s improving stability makes it easier for an outside bid to materialize, and so it has.

As for Nokia, such a deal would actually get them back into at least one business they only recently exited. In 2013, an independent Coriant was born out of Nokia Siemens Networks’ optical networking division. Buying Alcatel-Lucent would bring them back into the world of DWDM again, along with a whole lot of routing and other gear.

If Nokia buys Alcatel-Lucent, will we have to add even more hyphens to our headlines?  “The Finnish-Franco-American telecommunications vendor Alcatel-Nokia-Lucent …”

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Categories: Mergers and Acquisitions · Telecom Equipment