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The deal is expected to increase the scale of Nokia’s optical networks business by 75%
Nokia has announced the acquisition of California-based Infinera, a global supplier of optical transport networking solutions, for $2.3 billion, as the Finnish company looks to expand its optical networking in North America.
The deal is expected to “strengthen the company’s technology leadership in optical and increase exposure to webscale customers, the fastest growing segment of the market,” said Nokia. It expects to make €200 million of net comparable operating profit synergies by 2027.
The transaction, valued at $6.65 per share and working out at $2.3 billion, represents a 28% premium over Infinera’s closing share price on June 26, 2024. The deal will be financed with at least 70% cash and up to 30% in Nokia stock.
“In 2021 we increased our organic investment in Optical Networks with a view to improving our competitiveness,” said Nokia President and CEO Pekka Lundmark in a press release.
“That decision has paid off and has delivered improved customer recognition, strong sales growth and increased profitability. We believe now is the right time to take a compelling inorganic step to further expand Nokia’s scale in optical networks. The combined businesses have a strong strategic fit given their highly complementary customer, geographic and technology profiles,” he continued.
After the recently announced sale of XX, Nokia confirmed that its network infrastructure will be reshaped on three pillars: Fixed Networks, IP Networks and Optical Networks.
Just yesterday, Nokia announced that it will offload its subsea unit Alcatel Submarine Networks (ASN) to the French state for €350 million, solidifying its intention to focus on its core network infrastructure portfolio. Nokia will retain a 20% shareholding along with board representation to ensure a smooth transition, at which point the French state will take the remaining 20%.
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