Nokia In Talks To Buy Rival Alcatel-Lucent

Nokia has confirmed it is in talks to purchase French rival Alcatel-Lucent in a move that would create a new European networking giant better equipped to take on Ericsson, Huawei and ZTE.

Reports yesterday suggested Nokia was ready to offload its HERE maps business to fund the long-touted takeover, but it appears as though the Finnish firm has decided not to waste any time.

“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,” the two companies said in a statement. “There can be no certainty at this stage that these discussions will result in any agreement or transaction.

“A further announcement will be made when appropriate.”

Nokia Alcatel-Lucent merger

If a deal is reached, it would mark the latest stage of consolidation in the telecommunications equipment market. Alcatel merged with Lucent, a spin off from AT&T, in 2006, while Nokia bought out its partner Siemens in the Nokia Siemens Networks (NSN) joint venture in 2013.

The HERE maps, advanced technology and networking arms were the three businesses Nokia was left with following Microsoft’s £4.6 billion acquisition of the Espoo-based firm’s devices and services unit last year, but it appears as though the company is ready to put all its eggs in one network basket.

However it has been suggested any takeover could attract the attention of the French government, which may be keen to protect jobs and influence in the communications industry. Other regulatory authorities might also be concerned about a reduction in competition in the market.

The current Nokia has an estimated value of €28 billion (£20.24bn) and supplies networking equipment to mobile operators around the world. It recently secured the largest share by a non-Chinese vendor for the second phase China Telecom’s LTE rollout, having already played a major role in phase 1.

Nokia is also highly active in 5G research and has achieved wireless data transmission speeds of 2Gbps – raising the possibility of a commercial network launch in time for the 2020 Tokyo Olympics in Japan with partner NTT DoCoMo.

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