Nokia in advanced talks to buy Alcatel-Lucent

Nokia revealed Tuesday it’s in advanced talks to buy the ailing French telecoms company Alcatel-Lucent, an apparent bid to become a leading global networks operator.
Hopes for a deal were boosted by news that the French government, which has a history of intervening in takeover attempts by foreign companies, would give its blessing.
In a brief statement, Nokia Corp. said the two companies are in negotiations “with respect to a potential full combination which would take the form of a public exchange offer by Nokia for Alcatel-Lucent.”
After plunging 7 percent in Helsinki, Nokia stock closed down 3.6 percent at 7.49 euros in late trading while Alcatel-Lucent, which has been losing money since its creation in 2006, saw its share price leap 16 percent in Paris. That put Alcatel-Lucent’s market value at 12.7 billion euros (USD13.42 billion).
The Finnish company gave no details of the talks and denied further comment except to say that a further announcement would be made when appropriate.
“Nokia has been reorganizing the business for some time and the networks market is very competitive so it makes real sense to merge the networks,” said Neil Mawston from Strategy Analytics near London. “Nokia became a bit of a sprawling mess in the latter years with devices struggling and maps not quite living up to its expectations.”
Both companies’ chief executives, Nokia’s Rajeev Suri and Alcatel-Lucent’s Michel Combes, met with French President Hollande briefly on Tuesday afternoon but did not talk to reporters after the meeting. The French government said it would support the deal.
“It’s a good operation for Alcatel-Lucent” because it will allow the creation of a “European champion” with “no job cuts” in France, Economy Minister Emmanuel Macron said following the meeting at the Elysee.
Nokia, which began as a maker of paper and gum boots in 1865, transformed into a home electronics firm before becoming an innovator in the wireless industry and the world’s top cellphone maker. But it met its match when Apple launched the iPhone and also was unable to compete against Google Inc.’s Android operating system and cheaper handsets from Asia. Matti Huuhtanen, Helsinki, AP