Finnish networking supplier Nokia is holding acquisition talks with French network infrastructure firm Alcatel-Lucent.
The two companies confirmed they were hammering out the details of a potential full combination early on Tuesday (14 April 2015), following some media speculation.
While stressing that there was no certainty of a deal going forward at this point in time, any merger resulting from the negotiations would take the form of a public exchange offer by Nokia for Alcatel-Lucent. The two parties said they would make a further announcement “when appropriate”.
Citing sources close to the discussions, Bloomberg reported that a deal could value Alcatel-Lucent at somewhere in the region of $13bn (£8.87bn) and said the resulting company would be the second-largest networking supplier in the world, behind Cisco and ahead of Huawei.
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Nokia and Alcatel-Lucent had previously been the subject of speculation around a potential merger, but following the $7.2bn sale of Nokia’s flagging mobile handset business to erstwhile partner Microsoft in 2014 – which left Nokia flush with cash and free to concentrate on the core networking side of its organisation – the time has come to move forward.
It is thought Nokia sees its strength in wireless networking equipment and Alcatel-Lucent’s fixed network business as a strong combination for the future.
Separately, it was reported earlier in the week that Nokia is exploring a sale of its loss-making Here mapping service, which could net it around $2bn. Nokia bought onling mapping business Navteq – which subsequently formed a substantial chunk of Here – for more than $8bn in 2008.
Apple, Microsoft and Yahoo have all been touted as potential buyers, but another surprise contender may be minicab firm Uber.