Nokia confirms acquisition of French telecommunications company Alcatel-Lucent

HELSINKI – Nokia confirmed Wednesday it is acquiring the ailing French telecom company Alcatel-Lucent through a public exchange offer in France and the United States, in a bid to become a leading global networks operator.

The Finnish company said the all-share transaction will be on the basis of 0.55 of a new Nokia share for every share of Alcatel-Lucent. The share offer values the French concern at 15.6 billion euros (US$16.5 billion).

Alcatel-Lucent shareholders would own 33.5 per cent of the fully diluted share capital of the combined company, with Nokia shareholders owning 66.5 per cent.

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The deal has been approved by each company’s board of directors and is expected to close in 2016 subject to regulatory and other approvals, Nokia said.

The announcement follows confirmation a day earlier that Nokia was in advanced talks to buy Alcatel-Lucent, which has been racking up billions of euros of losses since its creation in 2006.

Both companies’ chief executives, Nokia’s Rajeev Suri and Alcatel-Lucent’s Michel Combes, met with French President Francois Hollande briefly on Tuesday afternoon, and the French government said it would support the deal.

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Nokia has recently made a turnaround since its 5.4 billion-euro sale of the lossmaking handset business to Microsoft a year ago, with three remaining sectors: networks, HERE mapping services and technologies and patents.

Nokia also said Wednesday it has “initiated a review of strategic options, including a potential divestment, for its HERE business.” It gave no details.

Alcatel-Lucent, which has undergone repeated rounds of restructuring since the 2006 merger of France’s Alcatel and U.S.-based Lucent Technologies, is laying off more than 10,000 workers and last year made a net loss of 118 million euros.