The Finnish Nokia -konzern and the French Alcatel-Lucent merge the largest network in the world. So companies want to cut out the cheap competition from China. But the French government has concerns.
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Nokia and Alcatel-Lucent merge the largest network in the world
07.57 Clock: The Finnish Nokia -Konzern takes its US-French competitor Alcatel-Lucent , and so could the largest network in the world with a sales of 100 billion euros . The new company will be called Nokia, corporate headquarters will be Finland, divided the two telecommunications companies on Wednesday in Paris. The Finnish company has 0.55 shares for a share certificate for Alcatel-Lucent .
This will Alcatel-Lucent with a total of 15.6 billion euros voted it said. That is a premium of approximately 28 percent on the average share price over the past three months. The deal is expected to close in the first six months of next year. 2019 should be saved by taking over 900 million euros.
expert analysis firm Ovum, Mark Newman said, Nokia and Alcatel-Lucent complemented each other well . The Finns were strong in mobile networks and the company from Paris in the fixed network business. But it was a great challenge, product ranges and customer should be merged. In the lucrative contracts for the construction of networks of the currently fastest LTE radio data transmission Nokia and Alcatel-Lucent have together 26 percent. Huawei has 36 percent and Ericsson a third.
Network equipment supply technology for telecom companies . Especially with the growing traffic on smartphones telecom companies always need new equipment for their networks. In the coming years, a great business to the next data radio standard 5G announces that will allow much faster Internet on the go. However, there is still a market with few buyers and fierce competition between providers of network technology.
It established Western providers are under increased pressure aggressive rivals from China. Together, Nokia and Alcatel-Lucent could better compete with them. Finally, on Tuesday the company had confirmed talks about a merger according to media reports. Nokia after the sale of the mobile phone division at Microsoft mainly a network equipment supplier.
Alcatel-Lucent is worth in the stock market over 11 billion euros, the share price rose yesterday after the Confirmation of the takeover talks by about 16 percent. The market value of Nokia is about 28 billion euros and the Finns had last cash reserves of around 7.7 billion euros. With a combined offer of money and own shares Nokia could therefore lift a takeover financially.
Resistors from Paris against a possible job cuts could hamper a deal. For the current proportions of Nokia and Alcatel-Lucent make austerity measures likely after a merger. The French government has declared the telecommunications industry to an industry of national interest and therefore has an eye on a possible sale of the Parisian company
After the meeting in the Elysee Palace Economics Minister Emmanuel Macron expressed but positive.: “It’s a good deal for Alcatel-Lucent, because it’s a deal for the future,” he was quoted by the Financial Services Bloomberg. The company can not preclude the growing competition from Chinese vendors alone. “Two years ago, Alcatel-Lucent was almost bankrupt (…).”
Nokia had late last year 54,600 employees in the network area and Alcatel-Lucent total of about 50 000. The Nokia Group generated sales of 12.7 billion euros. The lion’s share comes from the network business, the mobile phone division was sold to Nokia Microsoft. Alcatel-Lucent has with 13.2 billion euros sales of similar magnitude. The Group was formed from a merger between Alcatel and Lucent of France from the United States. Nokia for operation in the network technology used to be a common sheep business with Siemens, took over in 2013, however, the 50-percent share of the Germans.
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