Nokia has confirmed that it will buy French telecom company Alcatel-Lucent for $16.6 billion in stock. Terms of deal has already been finalized and approved by both companies. Nokia is expecting to close the deal by the first half of 2016.
Nokia will offer Alcatel-Lucent shareholders 0.55 shares in the combined company for every share they hold. Resulting company will be 33.5 percent in Alcatel’s hands and 66.5 percent in Nokia’s hands.
After this deal, Nokia and Alcatel will combine their research and development team to compete with Ericsson and Huawei in various telecom fields including 5G. The combined company will be at second place in global wireless market with share of 35 percent. Ericsson holds 40 percent market share while Huawei only has 20% market share.
Nokia will not cut the jobs and will keep France as “a vibrant centre of the combined company”. The revamped Nokia board will have nine or 10 members, with three new members from Alcatel-Lucent. Vice-chairman of Alcatel will also get the place in board members.
In a different news, Nokia also confirmed that it is interested in selling its HERE maps unit which is valued around 6.9 billion euros.
