Nokia makes $16.7b offer for Alcatel-Lucent

16 Apr 2015

The merger negotiations between Nokia and Alcatel-Lucent have yielded an offer, with Nokia agreeing to a share swap deal valuing Alcatel-Lucent at €15.6 billion ($16.7 billion).

Nokia has offered to issue 0.55 new shares for every Alcatel-Lucent share, acquiring all of Alcatel-Lucent's stock.

The purchase price translates to a 34% fully-diluted premium and a 28% premium for Alcatel-Lucent shareholders.

In a webcast, Nokia executives said they are pursuing the acquisition to allow the vendor to target quadplay operators with widest possible portfolio. Chairman Risto Siilasmaa noted that the deal is about scope rather than scale.

Both operators' boards have approved the proposed transaction, but the deal still requires the approval of Nokia shareholders, French regulators and others.

French authorities have historically been reluctant to approve deals which involve the sale of local companies to foreign interests.

But Nokia has included a number of sweeteners to make the deal more palatable to French regulators, including a pledge not to cut more jobs in the country in terms of volume, and to add 500 new R&D jobs in the nation, Reuterssaid.

In the webcast, Nokia CEO Rajeev Suri cautioned that other regions may not fare as well. “There will be some impact on headcount as part of the synergies, but at this stage we can't say how much headcount reduction will take place,” he said.

News of the proposed acquisition came one day after Nokia and Alcatel-Lucent confirmed that they are in advanced merger talks, and days after rumors surfaced that Nokia may sell its HERE mapping business to help raise funds for the deal.

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