Kirill Kedrinski - Fotolia

Nokia takes control of Alcatel-Lucent

Nokia takes control of 80% of outstanding Alcatel-Lucent shares and prepares to wrap up multi-billion euro deal

Nokia has successfully taken control of nearly 80% of outstanding shares in competitor Alcatel-Lucent and will move to combine the two companies by 14 January 2016.

Interim results of the initial offer period of Nokia’s public exchange offer for Alcatel-Lucent’s securities in both France and the US, released by the French stock market authority, Autorité des Marchés Financiers (AMF), showed that if confirmed later in the week, Nokia would control 79.3% of Alcatel-Lucent’s share capital and 78.9% of its voting rights.

Rajeev Suri, Nokia’s president and CEO, said: “We are delighted that the offer has been successful and that Alcatel-Lucent’s investors share our confidence in the future of the combined company.

“As of 14 January, Nokia and Alcatel-Lucent will offer a combined portfolio of the scope and scale to meet the needs of our global customers. We will have unparalleled research and developmet and innovation capabilities, which we will use to lead the world in creating next-generation technology and services.”

In a statement, Nokia said it was in the best interests of Alcatel-Lucent shareholders to tender their remaining stock. If it reaches 95% ownership of the share capital it will move to squeeze out the remaining shares.

Following completion of the €16bn (£11.2bn) deal – first announced in April 2015 – Nokia means to delist Alcatel-Lucent in the US.

It will also embark on a €7bn programme to optimise its capital structure and return excess capital to Nokia shareholders. The Finns hope this will include the return of €4bn in distributions to Nokia shareholders, while remaining Alcatel-Lucent shareholders get nothing.

The combined company is set to make sales of around €25bn per annum, with operating profit of €300m.

It will be second only to Ericsson in terms of the supply of carrier-grade telecoms networking technology, and will edge Huawei into third place, while also becoming a clear leader in long term evolution (LTE) and fixed broadband hardware.

It will also gain strength in areas such as IP routing, small cells and software-defined networks, as well as more clout in the US cellular market.

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