After two years of discussion, Nokia has announced its acquisition of Alcatel-Lucent for a sum of $16.6 billion. The transition will combine two of the smallest network equipment firms in Europe, thus better equipping them to take on industry leaders like Ericsson and Huawei.Nokia will give each Alcatel-Lucent stockholder .55 of a Nokia share. That works out to a value of $4.32 for each Alcatel-Lucent share. When the deal closes in the first half of 2016, Alcatel-Lucent stockholders will own 35% of the combined company. Nokia will continue to remain based in Finland under the care of Chairman Risto Siilasmaa and Chief Executive Rajeev Suri. Additionally a vice chairman will be appointed from Alcatel-Lucent. The deal is also expected to strengthen ties between Finland, and France where Alcatel-Lucent is now headquartered.
Nokia said that as a result of the deal, it will look to sell some assets including the highly regarded HERE maps business. Rumors that HERE was being shopped started to circulate last week. A combined Nokia-Alcatel-Lucent immediately becomes a competitor to Ericsson, which has the largest market share in the wireless network equipment industry at 40%. Nokia now jumps into the number two slot with 35% of the pie. Huawei, the low-cost leader, owns 20% of the market.
source - WSJ