Nokia, Alcatel-Lucent merger operational as of January 14
Mon 4 Jan 2016
Finnish telco Nokia has today confirmed it has gained 80% of outstanding shares at French-American rival Alcatel-Lucent in a €15.6bn (approx. £11.5bn) deal. A complete merger of the two firms is expected to be fully operational by Thursday 14th January.
According to an interim report released by the French stock market authority, Autorité des Marchés Financiers (AMF), Nokia now holds 79.3% of Alcatel-Lucent’s share capital and 78.9% of its voting rights.
“We are delighted that the offer has been successful and that Alcatel-Lucent’s investors share our confidence in the future of the combined company,” noted Nokia president and CEO Rejeev Suri. “Nokia and Alcatel-Lucent will offer a combined portfolio of the scope and scale to meet the needs of our global customers,” he said, adding that as of the 14th January “we will have unparalleled research and development and innovation capabilities, which we will use to lead the world in creating next-generation technology and services.”
In a statement, Nokia urged Alcatel-Lucent shareholders to tender their remaining stock. If the company can reach 95% ownership of the share capital, convertible bonds and voting rights, it will be able to squeeze out the remaining shares.
The completion of the deal, first announced last April, will see Nokia de-list Alcatel-Lucent in the U.S. Other plans include a €7bn programme to streamline its capital structure and return excess capital to Nokia shareholders – returning nothing to Alcatel-Lucent shareholders.
The merged group is expected to hit an annual revenue of around €25bn, with an operating profit of €300mn. These figures will set the combined company second only in the telecom networking market to Ericsson, with Huawei following in third position. It will also lead in the development of Long Term Evolution (LTE) technology and fixed broadband hardware, as well as gaining traction in IP routing, small cells and software-defined networking (SDN).