Nokia to buy Alcatel-Lucent for £11.2 billion

April 15, 2015 | 11:30

Companies: #bell-labs #nokia

Nokia may have exited the smartphone business, but it's far from down-and-out: the Finnish company has just agreed the acquisition of telecoms specialist Alcatel-Lucent in a deal valued at €15.6 billion (£11.2 billion).

Nokia, a company which was founded as a rubber manufacturer, struggled with the move from featurephones to smartphones. Its homebrew Symbian OS was ill-suited to the new paradigm, and its successor Maemo - later MeeGo - failed to gain traction. In 2008, it abandoned the Japanese market and slashed jobs to stay afloat, before signing a deal with Microsoft to use its Windows Phone platform for future devices in 2011. This deal reached its logical conclusion in 2013 when Microsoft acquired Nokia's mobile arm outright, leaving the Finnish company to concentrate on selling telecoms equipment and services to the industry rather than shiny toys to consumers.

Anyone predicting that the deal would be the death of Nokia will be eating humble pie, however, with the announcement that the company has agreed a £11.2 billion deal to buy rival telecoms specialist Alcatel-Lucent. Under the terms of the agreement, Alcatel-Lucent will be merged into Nokia along with the noted Bell Labs and its hefty collection of patents.

'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,' claimed Nokia president and chief executive Rajeev Suri of the deal, pointing towards plans to develop 5G, IP and software-defined networking products alongside cloud computing, analytics, sensor and imaging platforms. '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.'

'A combination of Nokia and Alcatel-Lucent will offer a unique opportunity to create a European champion and global leader in ultra-broadband, IP networking and cloud applications,' added Michel Combes, chief executive of Alcatel-Lucent. 'I am proud that the joined forces of Nokia and Alcatel-Lucent are ready to accelerate our strategic vision, giving us the financial strength and critical scale needed to achieve our transformation and invest in and develop the next generation of network technology.'

The deal, which Nokia has confirmed will result in 'organisational streamlining' - job losses, in other words - is share-based, and expected to complete in 2016.
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