The Smoke Clears and Indeed, Nokia Will Buy Alcatel-Lucent

This week started with rumors out of Europe that Finland-based Nokia was talking about a buyout with Alcatel-Lucent, rumors that were soon confirmed by both companies. This morning they followed through and sealed the deal.

Nokia will be paying stock worth €15.6 billion ($17B) to move up the marketshare ladder next to Ericsson and Huawei. Nokia shareholders will own about 2/3 of the combined company. As expected, they are making promises to France to keep Alcatel-Lucent’s Frenchness intact, meaning the jobs not already being cut will stay and French regulators seem to be tentatively on board. No mention of what’s left of the other half of Alcatel-Lucent over in the USA, at least in what I’ve read so far.

Along the way, Nokia will get to move into the router business amongst other things. They’ll also become a bigger name in the US beyond the mobile phone category Americans generally associate the name with. But there will likely be other pieces of Alcatel-Lucent that Nokia will divest (if ALU doesn’t do it first). In fact, there’s already a rumor that Flextronics is looking to buy Alcatel-Lucent’s Chinese joint venture in Shanghai.  Of course, Alcatel-Lucent had already been selling off pieces of itself for some time.

As for the hyphen thing, they won’t be playing that game this time — it will just be Nokia.

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Categories: Mergers and Acquisitions · Telecom Equipment