Thursday, April 16, 2015

Nokia targeting wireless networking market share - To merge with Alcatel-Lucent

With market share on its mind and possibly to cut operating costs, 900 million euros worth of costs on an annual basis to 2019, Nokia (NYSE:NOK) is in advanced talks to buy the French telecoms giant, Alcatel-Lucent (NYSE:ALU). In a press release by Nokia, the deal is worth $16.6 billion.

By merging with Alcatel-Lucent, which proposal has met public approval by the French government, an unlikely quarter in lieu of its history of frowning on foreign acquisitions, Nokia aims to have access to North American market, notably Alcatel-Lucent's partnership with Verizon (NYSE:VZ) and AT&T (NYSE:T). Also, combining their strengths will make Nokia the second biggest router company in the market, 35% of market share, after Swedish Ericsson (NASDAQ:ERIC). Cisco (NASDAQ:CSCO) which is in second place would find itself in stiff competition with Nokia.

Revenue shares in wireless networking.
Credit: See chart on site.

In a similar report, Nokia is said to be interested in selling its maps business, HERE, in order to focus on its core strength – wireless networking. According to a report, the proceeds from the sale of HERE division would be used to buy Alcatel-Lucent. The HERE unit is valued at approximately $2.1 billion.

Meanwhile, Nokia’s stock price has jumped relatively to that of its competitors, Ericsson and Cisco.
Nokia shares jumped this afternoon. Nokia blue, Ericsson red and Cisco green.
Credit: Yahoo Finance. See chart on website.

No comments:

Post a Comment

Your comments here.