Finland’s Nokia revealed that it is in “advanced” merger discussions with Alcatel-Lucent, after the two companies have been rumored to be discussing a potential partnership. Nokia’s shares have fallen up to 6 percent after the news of the potential merger and on the other hand, Alcatel-Lucent stocks were up to 15 percent higher.
According to a reliable source, the potential merger would be in the form of a public exchange offer by Nokia for Alcatel – Lucent. The statement also included some words of caution: “There could be no certainty at this point that these discussions will result in any agreement or transaction.”
It is unclear at this point if Nokia would acquire all of Alcatel-Lucent’s assets, or it is only eyeing its wireless arm. Credit Suisse rated stock of both Nokia and Alcatel-Lucent on Monday, and mentioned that a fair value for the Alcatel – Lucent company’s wireless business would be 2-2.5 billion euros ($2.1-2.7 billion). Credit Suisse representative mentioned: “We believe that such a potential deal would allow Nokia to significantly improve its presence in the U.S. with AT&T and Verizon (where Ericsson and Alcatel-Lucent are key suppliers).”
Indeed, combining Nokia and Alcatel – Lucent would result in a major powerhouse in Europe and potentially a potential entry to US markets but could affect jobs. In response to this uncertainty, French Economy Minister Emmanuel Macron announced on Tuesday that if ever a deal with transpire between the two companies, there will be no job cuts in France. This announcement followed a meeting at the French Elysee between the chief executives of Nokia and Alcatel-Lucent and French President Francois Hollande.
“It’s a good move for Alcatel-Lucent because it is a move for the future, because we are building, with this tie-up, a new conquest for Alcatel-Lucent, which was a company in great difficulty two years ago,” Macron also commented.
Nokia Oyj is a Finnish multinational communications and information technology company. Nokia has headquarters in Espoo, Helsinki metropolitan area. In 2014, Nokia employed 61,656 people across 120 countries, conducts sales in more than 150 countries and reported annual revenues of around €12.73 billion. Nokia is a public limited-liability company listed on the Helsinki Stock Exchange and New York Stock Exchange It is the world’s 274th-largest company measured by 2013 revenues according to the Fortune Global 500.
Nokia is also a significant contributor to the mobile telephony industry, having assisted in development of the GSM and LTE standards, and was, for a period, the largest vendor of mobile phones in the world. It is the biggest supplier of the smartphone industry through its Symbian platform, but it was soon overshadowed by the growing dominance of Apple’s iPhone line and Android devices. Nokia eventually entered into a pact with Microsoft in 2011 to exclusively use its Windows Phone platform on future smartphones. Nokia stock market evolution: http://www.marketwatch.com/investing/stock/nok
About Alcatel – Lucent
Alcatel-Lucent is a French global telecommunications equipment company, with headquarters in Boulogne-Billancourt, France. It major lie up focuses on fixed, mobile, and converged networking hardware, IP technologies, software, and services. Alcatel-Lucent has operations in more than 130 countries. Alcatel-Lucent has been named Industry Group Leader for Technology Hardware & Equipment sector in the 2014 Dow Jones Sustainability Indices review ]and listed in the 2014 Thomson Reuters Top 100 Global Innovators for the 4th year in a row.
Alcatel-Lucent’s chief executive officer is Michel Combes and the non-executive chairman of the board is Philippe Camus. After seven consecutive years of negative cash flows, in October 2013 the company announced plans to slash 10,000 employees, or 14% of the total current 72,000 workforce, as a part of a €1 billion cost reduction effort.
In June 2013, Michel Combes has announced a new strategy calling it “The Shift Plan is a three-year plan including portfolio refocusing on IP networking, ultra-broadband access and cloud; 1 billion Euro in cost savings; selective asset sales intended to generate at least 1 billion Euro over the period of the plan and the restructuring of the Group’s debt. On October 1, 2014, Alcatel-Lucent has announced its take to improving employee training and this is through the Post & Telecommunication Economy Development Center.
Alcatel-Lucent is the o Bell Laboratories. Belli has the largest research and development facilities in the industry. Bell Labs has more than thousands of employees and has been awarded eight Nobel Prizes and the company holds over 29,000 patents. Alcatel – Lucent stock market evolution: http://www.marketwatch.com/investing/stock/alu