Nokia recently confirmed that it’s in discussions with Alcatel-Lucent on a major merger. Several reports have pointed to Nokia’s interest in Alcatel-Lucent, and this is the first time the Finland-based company has admitted something is indeed on the table.
Nokia published a public note of its discussions with Alcatel-Lucent on its website in an effort to address media speculation of the deal. “In relation to recent media speculation Nokia and Alcatel-Lucent confirm that they are in advanced discussions with respect to a potential full combination, which would take the form of a public exchange offer by Nokia for Alcatel-Lucent,” Nokia explained. “There can be no certainty at this stage that these discussions will result in any agreement or transaction. A further announcement will be made when appropriate.”
Earlier reports suggested Nokia is interested in Alcatel-Lucent’s wireless business and patents, but the company did not clarify if it’s actually seeking out owning all of those assets or just a part of the business. Alcatel-Lucent provides carriers with a lot of the hardware used to operate wireless networks, and several industry watchers have suggested that it makes sense for Nokia to snap up the company.
“We believe that such a potential deal would allow Nokia to significantly improve its presence in the U.S. with AT&T and Verizon (where Ericsson and Alcatel-Lucent are key suppliers),” Swiss bank Credit Suisse said in a recent research note, according to CNBC. The confirmation drove shares of Alcatel-Lucent up about 8.5 percent, while shares of Nokia are currently trading down about 4.4 percent.