Nokia Oyj yesterday confirmed it is acquiring the ailing French telecom Alcatel-Lucent SA through a public exchange offer in France and the US, in a bid to become a leading global networks operator.
The Finnish company said the all-share transaction would be on the basis of 0.55 of a new Nokia share for every share of Alcatel-Lucent.
The share offer values the French concern at 15.6 billion euros (US$16.51 billion).
Alcatel-Lucent shareholders would own 33.5 percent of the fully diluted share capital of the combined company, with Nokia shareholders owning 66.5 percent.
The deal has been approved by each company’s board of directors and is expected to close next year subject to regulatory and other approvals, Nokia said.
The announcement follows confirmation a day earlier that Nokia was in advanced talks to buy Alcatel-Lucent, which has been racking up billions of euros in losses since its creation in 2006.
Both companies’ chief executives, Nokia’s Rajeev Suri and Alcatel-Lucent’s Michel Combes, met with French President Francois Hollande briefly on Tuesday afternoon, and the French government said it would support the deal.
Nokia has recently made a turnaround since its 5.4 billion-euro sale of the loss-making handset business to Microsoft Corp a year ago, with three remaining sectors: networks, HERE mapping services, and technologies and patents.
Nokia also said yesterday that it has “initiated a review of strategic options, including a potential divestment, for its HERE business,” although it gave no details.
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