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Nokia Networks is aggressively clawing its way back to a top-three spot in the mobile broadband and network industry, as it prepares for a first-quarter acquisition wrap-up of the company that will plug its capability and market gaps.
Nokia planned to start merging rival Alcatel-Lucent into its operations to create an “innovation powerhouse” with the added scale and scope to regain market share following a strong turnaround in recent years, said Nokia head of marketing and corporate affairs Middle East and Africa Joachim Wuilmet.
Speaking to Engineering News Online on the sidelines of the eighteenth AfricaCom, in Cape Town, he said the acquisition, which would be completed in the first quarter of 2016, would combine the parties’ complementary offerings, customers and geographic footprints, with the backing of significant research and development resources and synergy potential.
Combining Alcatel’s Internet protocol (IP) networking, ultra-broadband access and cloud technology with Nokia’s strong network infrastructure, mapping and location-based technologies and advanced technology development and licensing, the merged group would boast “massive” scale in terms of its product portfolio.
The expanded Nokia’s development of future technologies, including fifth-generation, IP and software-defined networking, cloud, analytics and sensors and imaging, would get a shot in the arm.
Alcatel VP for Africa Daniel Jaeger explained that the combined company would emerge stronger, with significant cross-selling opportunities, complementing one another as opposed to just creating synergies.
Alcatel had also undergone a turnaround after battling through a tough environment and, despite analysts’ apprehension that the deal would spark a slowdown in contracts on the back of perceived risk and uncertainties, Alcatel had secured a significant number of contracts in recent months.
“Nokia and Alcatel-Lucent are natural partners given our highly complementary assets and geographical exposures,” Wuilmet said.
The tie-up would strengthen the company’s geographical footprint, with Alcatel’s strong North American market and Nokia’s entrenchment in Asia Pacific and Europe.
Together, the companies had combined net sales of €24.7-billion in 2014, with additional cross-selling opportunities expected when the transaction closed.
Operating cost synergies of about €900-million a year were also expected by 2018.
The bulk of regulatory and other required approvals for the all-share public exchange transaction, which would see Alcatel shareholders receive 0.55 of a newly issued share in Nokia for every ordinary share held in Alcatel, had been obtained in the past six months.