Nokia looking to bolster its network equipment operation through acquiring rival Alcatel Lucent
Nokia has confirmed it is in talks to acquire rival global network equipment provider Alcatel Lucent for a fee of around €11 billion.
The news follows increasing speculation Nokia is ready to sell its mapping division HERE, estimated to be worth £2 billion, which would help to fund any purchase.
Nokia warned however in a statement there was “no certainty” that discussions will result in any agreement or transaction – but “advanced talks” were underway.
The would see Nokia strengthen its position a global provider of network equipment against leading rivals, which include market leaders Ericsson, Huawei, NEC, Samsung and ZTE.
A joint statement read: “In relation to recent media speculation Nokia and Alcatel-Lucent confirm that they are in advanced discussions with respect to a potential full combination, which would take the form of a public exchange offer by Nokia for Alcatel-Lucent.
“A further announcement will be made when appropriate.”
Nokia launched the network division as part of a joint venture with Siemens, ‘Nokia Siemens Networks’ (NSN) in 2006, but has struggled to make a significant impact in the market when compared to its rivals, particularly around 4G/LTE. It has cut more than 17,000 jobs since 2011. Nokia bought out Siemens share for $2 billion last August rebranding as Nokia Solutions and Networks.
French firm Alcatel, a rival to ‘new’ Nokia – who sold its core hardware business to Microsoft a year ago for £4.5 billion, offers fixed, mobile and converged networking hardware, IP technologies, software, and services. It has operations in more than 130 countries and employs more than 62,000 staff.
Like wise Alcatel has undergone a number of changes to address falling profits, cutting around 10,000 staff since 2013 as a part of a €1 billion cost reduction effort. It current employs around 70,000 staff.
The firm achieved profits of €284 million in fourth quarter results, falling well below the €304 predicted by market analysts.