From the gossips to official press release in record time, the Nokia company is officially collaborating with Alcatel Lucent. “Combine” is what the press release calls it, it is very acquisition, Nokia is going to need Alcatel Lucent in an all share transaction which is valued at €15.6 billion.
The Nokia Company is providing its shares in exchange for Alcatel Lucent shares at 0.55 to 1 ratio. Right now Alcatel Lucent shareholders are going to end up with 33.5% of the joint company, Nokia shareholders is going to have the other 66%. The Board of Directors shareholders, regulatory bodies and other considerations has approved the deal.
It is necessary to mention that Alcatel Lucent is not attached with the Alcatel phones other than by name, Al manufacturers networking equipment similar to Nokia Networks. Along with their forced joint, both are going to tackle the development of 5G tech, the Internet of Things and the increased reliance on cloud services.
There were 40,000 R&D staff in 2014 (20000 of which from AL) working on a combined budget of €4.7 billion. Both companies have got strong presence in US, Europe, China and the Asia Pacific and working on anything from core network to cell networks. Regarding the previous year, the joint sales of the two companies reached at €25.9 billion along with a non-IFRS profit of €2.3 billion.
The manufacturer is going to be named as Nokia Corporation and maintain the headquarters in Finland (however along with strong presence in France). Now Nokia CEO Rajeev Suri is going to maintain his position in the new company, his post will be kept by Chairman Risto Siilasmaa.
Some rumors were there that Nokia is looking forward to retail its HERE Maps business and the press release mentions the company is reviewing its strategic options, which may or may not lead to a transaction.