Finnish telecommunications-equipment maker Nokia Corp. is in
advanced talks to buy French rival Alcatel-Lucent SA, the companies
said Tuesday, a deal that would create a new global networking
behemoth to rival Sweden's Ericsson and China's Huawei
Technologies.
The deal currently under consideration is a "full combination"
that would entail Nokia making a public offer for Alcatel-Lucent
stock, the companies said. The deal could still fall apart, they
added.
It isn't clear if the parties have agreed on a valuation.
Alcatel-Lucent's market capitalization stands at roughly EUR11
billion ($11.63 billion), while Nokia's market capitalization is
about EUR28 billion.
Alcatel-Lucent's shares bounded on the announcement, up 13% to
EUR4.38 in morning trading in Paris.
A Nokia-Alcatel merger deal would cap years of speculation about
a possible tie-up between the two firms, and reshape the
telecommunications-equipment business by creating a company with a
combined 2014 revenue of EUR25.9 billion and more than 100,000
employees in businesses spanning wireless communications and
Internet routing.
Market leader Ericsson reported revenue of EUR25.1 billion in
2014, while Huawei's telephone-carrier equipment business had
revenue of about EUR23.6 billion, at average exchange rates for the
year.
Cisco, which competes with Alcatel in Internet routing, amid its
broader enterprise and consumer businesses, had revenue of $47.1
billion for the year ending July 26.
Write to Sam Schechner at sam.schechner@wsj.com
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