Nokia Announces Acquisition of Infinera to Expand Optical Networking Solutions

Nokia has revealed its strategic agreement to acquire Infinera, a renowned supplier of cutting-edge open optical networking solutions and advanced optical semiconductors. The acquisition, valued at $2.3 billion, will bolster Nokia’s position in the optical networking market.

The deal, set at $6.65 per share for Infinera, will be a combination of cash and Nokia’s ADSs. This move aims to enhance technology leadership, increasing exposure to the fast-growing webscale customer segment.

With a focus on boosting profitability and fostering new product development, the merger is a pivotal step in Nokia’s journey towards achieving a double-digit operating margin. The company estimates significant synergies and efficiencies from the acquisition, projecting €200 million in net comparable operating profit synergies by 2027.

Pekka Lundmark, CEO of Nokia, emphasized the complementary nature of the acquisition, highlighting the potential for enhanced optical solutions and improved margins. Federico Guillén, Nokia’s president of network infrastructure, expressed optimism about growth opportunities and operational improvements resulting from the merger.

David Heard, CEO of Infinera, conveyed enthusiasm about the value this collaboration brings to global customers. The transaction, subject to shareholder and regulatory approvals, is expected to reshape Nokia’s network infrastructure significantly.

The divestment of Alcatel Submarine Networks, along with the acquisition of Infinera, underscores Nokia’s strategic restructuring and focus on core markets. The sale to the French government, valued at €350 million, aligns with Nokia’s aim to strengthen its network infrastructure business.

Industry rivals like Cisco Systems Inc. and Ciena Corp. have faced revenue contractions, making strategic moves like the Nokia-Infinera acquisition crucial in the evolving telecom landscape. Financial advisories for the deal were provided by PJT Partners and Centerview Partners LLC.