More on NOK/ALU: Wireless asset deal reportedly clos Apr 13 2015, 16:10 ET | By: Eric Jhonsa, SA News Editor Contact this editor with comments or a news tip
Sources tell Bloomberg Nokia (NYSE:NOK) might announce a deal to buy Alcatel-Lucent's (NYSE:ALU) wireless infrastructure hardware assets "as early as this week." Though a full-blown buyout of Alcatel has also reportedly been examined, a wireless deal "remains the most likely scenario."
Nokia execs are reportedly working to win the French government's support. French government reps are said to be working on a compromise that would protect some domestic R&D jobs.
Acquiring Alcatel's wireless unit (2014 sales of $5B) would yield cost synergies and increase Nokia's mobile infrastructure scale as it battles against market leader Ericsson (ERIC) and China's Huawei and ZTE. It would particularly strengthen Nokia's position in North America (Lucent's stronghold prior to the merger) and China. At the same time, the post-merger entity could lose share with carriers already relying on both Alcatel and Nokia, and wanting to maintain their current level of supplier diversity.
For Alcatel, a sale would further lower the company's net debt load (a recent priority) and shed a business that has underperformed relative to Alcatel's IP routing unit.Alcatel closed up 7.9%. Nokia closed up 3%.
Earlier: Nokia reportedly in talks to buy Alcatel-Lucent assets
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