BERLIN: Nokia Oyj agreed to buy Alcatel-Lucent SA in an all-stock deal valued at 15.6 billion euros ($16.6 billion) to create the world’s largest supplier of equipment that powers mobile-phone networks.
Nokia’s biggest-ever acquisition would result in a vendor that surpasses Ericsson AB and Huawei Technologies Co. in wireless-infrastructure revenue. Nokia Chief Executive Officer Rajeev Suri, who will run the enlarged company, will bolster its position in China, a market of 1.3 billion mobile subscribers, and take on contracts with the two biggest U.S. carriers — Verizon Communications Inc. and AT&T Inc.
Alcatel investors will receive 0.55 Nokia share for each stock they own, the companies said Wednesday. The deal values Alcatel at 4.12 euros per share, 8 percent less than the most recent closing price. The stock fell 9 percent to 4.07 euros at 9:07 a.m. in Paris after soaring 16 percent on Tuesday. Nokia rose 2.8 percent in Helsinki.
“Nokia has to include that there will be restructuring costs as well,” said Mathias Lundberg, an analyst at Swedbank AB. “They use different platforms in their products and to mitigate this they have to either switch products at the customers or develop a joint technical platform.”
Nokia, based in Espoo, Finland, also said it started a strategic review for its HERE maps business. Bids are expected soon for the unit, which is valued by Nokia at about 2 billion euros and has attracted interest from companies and private-equity firms, people familiar with the matter have said.
The takeover would also let Nokia add products used to transmit landline and Internet traffic, giving it a more complete offering to sell to carriers as the amount of data traveling on networks increases with the popularity of Netflix and other video and music services.
