Nokia announced late yesterday that they’ll be acquiring Alcatel-Lucent for €15.6 billion in an all stock deal. The deal has been approved by the boards of both companies, but will still need the ‘final ok’ from various regulatory authorities. Combined sales of the new company will be approximately €26 billion/year.
The IoT space is increasingly a strategic priority for telcomm service providers and, will undoubtedly, be an important part of the future of the new combined company. In order to anticipate any concerns coming from France about the merger and support the growth of the IoT ecosystem, Nokia has pledged to create a €100 million investment fund focusing on French startups focusing on IoT and the industrial internet. They’ll also, concurrently, launch a 5G and small cell research center and new cyber security lab in France as well.
The future of the new Nokia Corporation in the fast-growing IoT space will be a topic which Alcatel-Lucent CEO, Michel Combes will be able to elaborate on when he headlines at our Connected Conference next month, 28-30 May at the Carreau du Temple.
The new ‘Nokia Corporation’
The new, Nokia Corporation, will become the #2 player with 35% share in the highly competitive and slowing telecom equipment sector, putting it 4 points behind Ericsson, but far of ahead of China’s fast-growing Huawei Technologies.
Current Nokia CEO Rajeev Suri will continue on as CEO of the combined entity which will retain the Nokia brand name. Although the headquarters will remain in Finland, they’ll continue to retain key strategic office locations in Germany, the US, China and, of course, France.
As expected, the French government are of course reviewing the deal, to ensure, as always with these types of massive acquisitions/mergers, that Alcatel-Lucent’s 6k employees in France keep their jobs post-acquisition. At first glance, it looks like merger has a tentative green light from the French administration as after a meeting between the Alcatel-Lucent and Nokia CEOs and President Hollande, Finance Minister Emmanuel Marcon expressed the government’s reassurance that there won’t be “any job destruction in France”. Given the government’s repeated pronouncements about the importance of creating ‘European tech champions’, this deal should be right up their alley.