Nokia Oyj (HEL:NOK1V) after get rid of its trouble smartphone handset is investing the amount to acquire Alcatel Lucent SA (ADR) (NYSE:ALU), a wireless network-equipment unit for $2.7 billion or 2 billion euro, to expand its wireless network.
The company after selling its handset business to MSFT has gained 5.44 billion Euros in 2014 according to deal. The data from Bloomberg suggest that the company including in this deal would accumulate a total of 14 billion Euros in cash. This cash has the highest amount of balance on the company balance sheet, and the eighth number in non-finance firms in Europe.
Chief Executive Officer of Alcatel-Lucent Michel Combes has said the French company in order to survive its struggling business, strengthen its strategy to scale down many of its units, as well as selling some of its assets, to aid the lose making business.
Nordea Bank AB, analyst Sami Sarkamies, the current agreement makes complete sense. The finish company will have the financial support to carry out this kind of deal and the French company will put down its wireless unit. Due to these factors the deal is greater chance to complete.
The former smartphone giant has looking into alternatives including a grouping with Alcatel-Lucent’s handset networks business, reveal by source last month have the knowledge of matter. This takeover will once again open the U.S. market to Finish Company, as well as aiding the company to decrease the gap with market top player Ericsson AB. (ERICB). The analyst also expect this deal will cost 1 to 2 billion Euros to acquire wireless business, Pohjola Bank reveal the Finish company will also be able to begin again paying a dividend of approximately 40 cents a share.
The company in order to expand its wireless network acquires the entire stake in Siemens AG that produces 13 billion Euros annually and will account for over 90% of sales for the company after exits handset making. And the latest deal of wireless segment will add an additional 3.4 billion Euros in yearly sale after eliminating software and services. Alcatel Lucent SA (ADR) (NYSE:ALU) shares decreased -2.67% to $3.65 in last trading session.