Nokia Set to Acquire Alcatel-Lucent for $16.6 Billion

Alcatel-Lucent’s days as an independent company are soon coming to an end, as the company has agreed in principle to be acquired by Nokia in an all-stock deal valued at approximately $16.6 billion US or EUR 15.6 billion.

The deal will see Nokia offer Alcatel-Lucent 0.55 of a new Nokia share for every Alcatel-Lucent share. The transaction is currently expected to close in the first half of 2016.

When the deal closes, the current CEO of Nokia, Rajeev Suri, will become the CEO of the combined company, which will be known as Nokia Corporation and will be headquartered in Finland.

Alcatel-Lucent currently has approximately 52,600 employees, 20,000 of whom are engaged in R&D activities. Nokia expects that at the close of the transaction, the combined company will have more than 40,000 R&D employees.

Nokia is pledging to maintain employment levels in France, where Alcatel-Lucent is largely based. U.S.-based operations, including Bell Labs, will also be a focus for the combined Nokia/Alcatel-Lucent organization.

“Our innovation capability will be extraordinary, bringing together the R&D engine of Nokia with that of Alcatel-Lucent and its iconic Bell Labs,” Rajeev Suri, President and Chief Executive Officer of Nokia, said in a statement. “We will continue to combine this strength with the highly efficient, lean operations needed to compete on a global scale.”

Michel Combes, Chief Executive Officer of Alcatel-Lucent, commented that the new company will also provide Alcatel-Lucent employees exciting opportunities to be part of a global leader.

“A combination of Nokia and Alcatel-Lucent will offer a unique opportunity to create a European champion and global leader in ultra-broadband, IP networking and cloud applications,” Combes said in a statement

As a company, Alcatel-Lucent has struggled since it was created. It took the company six years to generate its first yearly profit in 2012.

Alcatel-Lucent was formed in April of 2006 as a merger of French telecom vendor Alcatel and US.-based Lucent. Lucent itself was a spinoff from AT&T’s Bell Labs division in 1996.

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and Follow him on Twitter @TechJournalist.

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