Nokia Expands Optical Networking with $2.3 Billion Infinera Acquisition

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Nokia has revealed its acquisition of Infinera, a California-based provider of optical transport networking solutions, for $2.3 billion. This strategic move aims to bolster Nokia’s presence in the North American optical networking market.

Nokia stated that this acquisition would enhance its technology leadership in the optical sector and increase its reach among webscale customers, the fastest-growing segment in the market. The company anticipates €200 million in net comparable operating profit synergies by 2027.

The deal, priced at $6.65 per share, reflects a 28% premium over Infinera’s closing share price on June 26, 2024. Nokia will finance the acquisition with at least 70% cash and up to 30% in Nokia stock.

“In 2021, we boosted our investment in Optical Networks to improve our competitiveness,” said Nokia President and CEO Pekka Lundmark. “This decision has yielded better customer recognition, strong sales growth, and increased profitability. We believe now is the right time to take this compelling inorganic step to further expand Nokia’s scale in optical networks. The combined businesses align well with their complementary customer, geographic, and technology profiles.”

Following the sale of a different division, Nokia confirmed its network infrastructure will be focused on three main areas: Fixed Networks, IP Networks, and Optical Networks.

Additionally, Nokia recently announced the sale of its subsea unit, Alcatel Submarine Networks (ASN), to the French state for €350 million. Nokia will retain a 20% shareholding and board representation to ensure a smooth transition, with the French state taking the remaining 20%. This move underscores Nokia’s commitment to concentrating on its core network infrastructure portfolio.

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