Nokia has agreed to buy French competitor Alcatel-Lucent for €15.6 billion; a move that comes barely 24 hours after the two companies said they were in “advanced talks” for a merger. The new combined company will still bear the Nokia name, although it expects to retain the Bell Labs brand from Alcatel for its network R&D activities.
It appears that Nokia’s ambitions to be a larger player as a provider of networking equipment are moving along swiftly, and it is expected to begin challenging its closest rival – Swedish firm Ericsson – in most major markets. The official press release says that the combined company will be able to serve a 50-percent larger market than Nokia could possibly manage on its own. This would potentially increase earnings from €84 billion to €130 billion.
Nokia has also announced a strategic review of its HERE mapping business; which has already been at the heart of speculation that it would be sold at some point. However, Nokia says that the review is an ongoing process that may or may not result in a decision for any transactions. Earlier reports indicated that there were several groups interested in acquiring HERE maps should Nokia decide to divest itself from the division; these included Uber Technologies and a group of German car makers.
The final sale of Alcatel-Lucent shares to Nokia is expected to conclude in early 2016.