SAN FRANCISCO
Device manufacturer Nokia announced Tuesday it was in talks to acquire parts of French telecom manufacturer Alcatel-Lucent, a declaration that has already boosted shares for both European companies.
The two companies have struggled to rise above their low positions in their respective telecommunications fields. By partnering with Alcatel, Finland’s Nokia is hoping to grab a bigger share of the budget end of the device market, especially from rivals like Sweden’s Ericsson and the young Chinese company Huawei.
In a statement published Tuesday, Nokia acknowledged reports of a deal while claiming there hasn’t been any agreement inked between the pair.
“In relation to recent media speculation Nokia and Alcatel-Lucent confirm that they are in advanced discussions with respect to a potential full combination, which would take the form of a public exchange offer by Nokia for Alcatel-Lucent,” Nokia noted. “There can be no certainty at this stage that these discussions will result in any agreement or transaction.”
The French government has welcomed the deal. French President François Hollande met Tuesday with Nokia CEO Rajeev Suri and Alcatel-Lucent CEO Michel Combes. Following the meeting, French economy minister Emmanuel Macron said that “the state supports the proposed merger” and claiming the deal would help both manufacturers compete with the popular new Chinese companies.
On the New York Stock Exchange, shares in Nokia jumped Tuesday morning amid the merger news, although they dropped back down in the afternoon. Shares in Alcatel-Lucent, however, rose steadily to more than 13 percent from its close Monday.
Nokia sold its handset division to Microsoft in 2013 after years of struggling against companies like Samsung. Since that deal, Nokia has reinvigorated its product line, including a tablet designed with Chinese markets in mind.
In 2014, the combined revenues of Nokia and Alcatel-Lucent was roughly $27 billion and the combined sales would beat out Huawei and Ericsson.
