Nokia purchases Alcatel-Lucent for $16.6 billion

Nokia purchases Alcatel-Lucent for $16.6 billionAfter 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

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