Nokia Partnered Alcatel-Lucent for $16.6 billion

By Vigneshwar

Published: Friday, April 17, 2015, 11:59 [IST]

After a long discussion, both tech companies Nokia and Alcatel-Lucent have collaborated with a $16.6 billion transaction that will combine two of the smallest network equipment firms in Europe.

Nokia Partnered Alcatel-Lucent for $16.6 billion

As per the deal, the Finnish company Nokia will give 0.55 of a Nokia share. That works out to a value of $4.32 for each Alcatel-Lucent share. During the first half of the 2016, Alcatel-Lucent stockholders will own 35% of the combined company.

Finland based company, Nokia said that it will look to sell some assets including the highly regarded HERE maps business.

Nokia Networks acquires a key product-focused portfolio from Alcatel-Lucent, including IP transport network, optical technology, specific network analytics and wireless technology assets.

Both Nokia-Alcatel-Lucent combinely compete with Ericsson, which has the largest market share in the wireless network equipment industry at 40%.

Nokia now jumps into the number two slot with 35% of the pie along with Huawei, which owns 20% of the market.

The deal is expected to be finalised in the first half of 2016, but it will take much longer for the portfolio rationalisation to have an effect on the market.

In the meantime, this will create a slowdown in infrastructure deals and could result in an advantage for the competitors.