Nokia has announced its intention to acquire telecoms equipment
company Alcatel-Lucent for €15.6 billion ($16.6 billion). The deal will
solidify Nokia's ambitions to become a major provider of networking
equipment that competes with market leader Ericsson, following the sale
of its mobile hardware division to Microsoft. Nokia and Alcatel-Lucent
plan to close the deal in the first half of 2016. The new company is
expected to use the Nokia brand, but will retain Alcatel-Lucent's Bell
Labs name for its R&D activities.
"The combined company will be uniquely positioned to create the foundation of seamless connectivity for people and things wherever they are," Nokia said in a statement. "This foundation is essential for enabling the next wave of technological change, including the Internet of Things and transition to the cloud. With more than 40,000 R&D employees and spend of €4.7 billion in R&D in 2014, the combined company will be in a position to accelerate development of future technologies including 5G, IP and software-defined networking, cloud, analytics as well as sensors and imaging."
In separate but related news, Nokia also announced today that it is reviewing its Here mapping business and may consider selling it off. "The strategic review of Here is on-going and it may or may not result in any transaction," reads a statement, which says that the proposal of the Alcatel-Lucent merger is "the right moment" to evaluate Here's future value.
Nokia moves to take on Ericsson
With about 114,000 employees
and sales of around 26 billion euros, the combined company will rank a
strong second in mobile equipment, with global market share of 35
percent, behind Ericsson at 40 percent and ahead of Huawei's 20 percent,
according to Bernstein Research.
The new Nokia will have stronger exposure to the important North American market, with major AT&T and Verizon contracts.
The new Nokia will have stronger exposure to the important North American market, with major AT&T and Verizon contracts.
"The combined company will be uniquely positioned to create the foundation of seamless connectivity for people and things wherever they are," Nokia said in a statement. "This foundation is essential for enabling the next wave of technological change, including the Internet of Things and transition to the cloud. With more than 40,000 R&D employees and spend of €4.7 billion in R&D in 2014, the combined company will be in a position to accelerate development of future technologies including 5G, IP and software-defined networking, cloud, analytics as well as sensors and imaging."
In separate but related news, Nokia also announced today that it is reviewing its Here mapping business and may consider selling it off. "The strategic review of Here is on-going and it may or may not result in any transaction," reads a statement, which says that the proposal of the Alcatel-Lucent merger is "the right moment" to evaluate Here's future value.
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