Skip to main content

Nokia in advanced talks to buy rival Alcatel-Lucent

Finnish telecoms firm Nokia has confirmed that it is in advanced talks to acquire competitor company Alcatel-Lucent.

Although, the deal has not yet been finalised, if successful it would create a powerful new player on the global network scene.

Read more: Nokia reports huge profits in Q4 after flogging mobile division

"Nokia and Alcatel-Lucent confirm that they are in advanced discussions with respect to a potential full merger, which would take the form of a public exchange offer by Nokia for Alcatel-Lucent," a Nokia press release read. "There can be no certainty at this stage that these discussions will result in any agreement or transaction."

According to the Wall Street Journal, Nokia’s market capitalisation currently stands at €28 billion (£20 billion) with Alcatel’s at €11 billion (£8 billion). A complete merger would certainly enable them to compete with global players of the likes of Ericsson and Huawei.

The company created in the wake of the merger would have a combined revenue in excess of €25 billion (based on 2014 figures) and more than 100,000 employees. To put that into context, Ericsson posted revenue figures of €25.1 billion in 2014, while Huawei’s telephone-carrier equipment business took €23.6 billion.

However, the merger could face some political hurdles, particularly in Alcatel-Lucent’s native France. Although, the French government is keen to create powerful European businesses to compete on a worldwide scale, Alcatel-Lucent is also viewed as a symbol of French business. It is believed that following the acquisition the new business may need to be structured in a way that keeps French interests at the core.

Read more: CES 2015: Alcatel bolsters its POP range with new tablet and smartphones

If the merger does go ahead, it will finally draw to a close years of speculation about a partnership between the two firms. The development also comes just a day after news spread that Nokia was set to acquire Alcatel-Lucent’s wireless infrastructure.