Nokia agrees to buy Alcatel-Lucent for $16.6bn, puts HERE on sale

Nokia is going to buy Alcatel-Lucent for $16.6 billion in shares. Once the merger is completed Alcatel-Lucent will take on the Nokia name. Though the deal has been approved by both companies’ boards, its completion is subject to receipt of regulatory approvals and other customary conditions. Nokia said that it expects, once everything has been completed, to close the deal on the first half of 2016.

In a statement, Nokia President and Chief Executive Officer, Rajeev Suri, said “Our innovation capability will be extraordinary, bringing together the R&D engine of Nokia with that of Alcatel-Lucent and its iconic Bell Labs. We will continue to combine this strength with the highly efficient, lean operations needed to compete on a global scale.”

Nokia has also confirmed that it is considering a sale of its mapping unit, HERE.

“That review is ongoing, it may or may not lead to a transaction, and any further announcements about Here will be made in due course, as appropriate,” Nokia said in a statement.

When Nokia sold its mobile phone unit to Microsoft, it kept three of its business units and now it is looking to part ways with one of those. HERE is by far the best mapping unit, beating Google Maps for convenience and its precise voice guide. HERE also works off-line, allowing users to download maps for use offline.

HERE

The news of Nokia selling HERE has come around the same time as the Nokia Alcatel-Lucent deal. In this deal, Alcatel-Lucent shareholders will get 0.55 shares of Nokia for each Alcatel-Lucent share that they own, in comparison to Nokia shareholders who would own up to two-thirds of the company and Alcatel-Lucent just over a third.

Current Nokia CEO Rajeev Suri will hold the same role in the combined company, which will keep the Nokia brand name and Finland headquarters, with key offices in France, Germany, the U.S. and China.

“Nokia is a global company, with deep roots and heritage in many parts of the world. When it joins with Alcatel-Lucent, it also expects that France, where Alcatel-Lucent is a fundamental participant in the technology ecosystem, will be a vibrant center of the combined company,” Nokia said.

Nokia has already begun to make plans to maximise the deal, saying that the combined company puts the them in a position to accelerate development of future technologies including 5G, IP and software-defined networking, cloud, analytics as well as sensors and imaging. Adding further that “Alcatel-Lucent and Nokia have highly complementary portfolios and geographies, with particular strength in the United States, China, Europe and Asia-Pacific. They will also bring together the best of fixed and mobile broadband, IP routing, core networks, cloud applications and services. This combination is expected to create access to an expanded addressable market with improved long-term growth opportunities.”

Other plans afoot with the deal are in the Internet of Things and cloud arena.

“A combination of Nokia and Alcatel-Lucent will offer a unique opportunity to create a European champion and global leader in ultra-broadband, IP networking and cloud applications. I am proud that the joined forces of Nokia and Alcatel-Lucent are ready to accelerate our strategic vision, giving us the financial strength and critical scale needed to achieve our transformation and invest in and develop the next generation of network technology.” Chief Executive Officer of Alcatel-Lucent, Michel Combes, said.