Nokia Completes Alcatel-Lucent Acquisition

Eighteen months ago in April 2015, Nokia announced a corporate deal to buy Alcatel-Lucent, a smaller rival in the competitive mobile or cellular network market. Although the deal was technically approved and was seen to be going ahead, Nokia needed to acquire all shares of Alcatel-Lucent and this was proving to be taking some time. Back in January 2016, Nokia announced that it had acquired more than three quarters of Alcatel-Lucent stock, giving it a controlling interest but not quite full control over the business. The Finnish company has announced steady increases in its acquisition over the year. However, this week Nokia announced that it had purchased all outstanding stock of Alcatel-Lucent, which many small shareholders had been keeping hold of in the hope of a more favorable price than Nokia's original offer.

Now that Nokia has complete and full control of Alcatel-Lucent, it will be able to complete the consolidation exercise with the smaller business and amalgamate costs within the two organisations and as such, realize the full benefit of the deal. The acquisition of Alcatel-Lucent is one part in a multi-year, multi-stage reinvention of Nokia, which started in 2013 when the Finnish company bought 50% of German networking specialist, Siemens. In 2014, Microsoft bought Nokia's smartphone division. This deal gave Microsoft control of the Lumia brand and meant that Nokia was now out of the mobile 'phone and smartphone businesses until later this year. In 2015 as well as buying Alcatel-Lucent, Nokia sold its Here mapping division. On the subject of smartphones, we have seen a number of Nokia-branded prototype models appearing over the last eighteen months and rumors that the Finnish business is planning to release a small family of devices. The Nokia-branded Android tablet, which is only available in limited markets around the world, was a liked and enjoyed product so the signs are positive.

As for the Alcatel-Lucent deal, Nokia has already managed to reduce the costs within Alcatel-Lucent but will be able to complete this. At the end of October, Nokia announced it had reduced losses to approximately $135 million for the third quarter, down from a loss of over $700 million in the previous quarter. Following the acquisition of Alcatel-Lucent, Nokia's networking division almost doubled sales to almost $6 billion. With the whole company now under Nokia's control, the company should be able to improve returns and in a statement the company explained: "...Nokia will now start eliminating the complexity and costs of running two separate public companies."

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About the Author

David Steele

Senior Staff Writer
I grew up with 8-bit computers and moved into PDAs in my professional life, using a number of devices from early Windows CE clamshells and later. Today, my main devices are a Nexus 5X, a Sony Xperia Z Tablet and a coffee cup.