Following news updates that Nokia is gearing up to sell its HERE mapping business, the Finnish giant has now confirmed that it will merge with French company Alcatel-Lucent to create an IP-connecting world.
A new press release posted today on Nokia’s website sees the finalization of the new deal to go through and will be expected to close in the first half of 2016. Transaction highlights include purchase of the French company valued at EUR 15.6 billion, with Nokia owning 66.5% of the total company shares. The new company will be called Nokia Corporation and will still be based in Finland.
Here is the statement from Nokia CEO Rajeev Suri:
“Together, Alcatel-Lucent and Nokia intend to lead in next-generation network technology and services, with the scope to create seamless connectivity for people and things wherever they are.
Our innovation capability will be extraordinary, bringing together the R&D engine of Nokia with that of Alcatel-Lucent and its iconic Bell Labs. We will continue to combine this strength with the highly efficient, lean operations needed to compete on a global scale.
We have hugely complementary technologies and the comprehensive portfolio necessary to enable the internet of things and transition to the cloud. We will have a strong presence in every part of the world, including leading positions in the United States and China.
Together, we expect to have the scale to lead in every area in which we choose to compete, drive profitable growth, meet the needs of global customers, develop new technologies, build on our successful intellectual property licensing, and create value for our shareholders.
For all these reasons, I firmly believe that this is the right deal, with the right logic, at the right time.”
This new development comes after a Bloomberg report published earlier today, citing the two companies are in ‘advanced talks’ over a possible full merger which includes purchasing Alcatel-Lucent’s core networking, wireless, and fixed-line access equipment businesses in an attempt to compete with Swedish rival Ericsson.
In separate, identical statements yesterday, both companies confirmed the ongoing talks, but added that the merger is not yet finalized and may dissolve.
“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.” –Alcatel
“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. There can be no certainty at this stage that these discussions will result in any agreement or transaction.” – Nokia
Any deal will require the seal of approval from the French government to proceed, which Nokia executives are in the process of seeking, according to the same report.