Nokia in Advanced Talks to Acquire Alcatel-Lucent's Mobile Networks Unit

Strategic Insights -

Finnish telecom firm Nokia Oyj is in advanced talks to buy Alcatel-Lucent's mobile networks unit in an effort to strengthen its core business and better compete with Ericsson AB in the market for next-generation mobile equipment. The potential deal, which may be announced as early as next week, would come just days after Bloomberg reported that Nokia is seeking buyers for its maps business known as HERE, valued at about $2.1 billion. A purchase of Alcatel-Lucent's mobile networks unit would be a strategic move by Nokia, as it seeks to emerge as the top network equipment supplier.

Key Takeaways:

  • Nokia is in advanced talks to acquire Alcatel-Lucent's mobile networks unit, which had 2014 revenue of $5 billion and accounted for 36% of Alcatel-Lucent's total sales.
  • The deal would significantly boost Nokia's market share and help it compete with Ericsson and Huawei in the market for next-generation mobile equipment.
  • Nokia is seeking buyers for its maps business, known as HERE, which is valued at about $2.1 billion.
  • Alcatel-Lucent has been struggling in its core markets in the US and Europe, and has lost money nearly every year since its creation in 2006.
  • The French government may need to approve the deal, as Alcatel-Lucent is a French company.

Statistics:

  • Alcatel-Lucent's mobile networks unit had 2014 revenue of $5 billion.
  • The unit accounted for 36% of Alcatel-Lucent's total sales in 2014.
  • Nokia is seeking buyers for its maps business, known as HERE, which is valued at about $2.1 billion.
  • Alcatel-Lucent has lost money nearly every year since its creation in 2006.
  • The company's financial performance has been impacted by the merger with Lucent Technologies in 2006.

Sources:

  • Bloomberg
  • Financial Times
  • Nokia Oyj
  • Alcatel-Lucent