Nokia aims to become networks giant with Alcatel-Lucent deal

 

Nokia is to buy ailing French telecom company Alcatel-Lucent for around 15.6 billion euros ($16.5 billion) through a public exchange of shares in France and the United States, in a bid that will see the newly created company become a leading global networks operator.

Though Alcatel-Lucent has been racking up billions of euros of losses since its creation in 2006, Nokia seems to believe it can cut costs and hopes the deal will give it scale in the market of providing the networks that mobile phones use.

The Finnish company said Wednesday that the all-share transaction will be on the basis of 0.55 of a new Nokia share for every share of Alcatel-Lucent. According to the deal, Alcatel-Lucent shareholders would own 33.5 percent of the fully diluted share capital of the combined company, with Nokia shareholders owning 66.5 percent.

Nokia stock was down nearly 2 percent at 7.35 euros in late trading in Helsinki while Alcatel-Lucent plunged more than 14 percent in Paris.

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