The transaction to create the biggest maker of equipment that underpins mobile-phone networks won’t prevent tough competition in Europe from Ericsson and Huawei Technologies across the 28-nation EU, the European Commission said in an emailed statement on Friday. It added that “a number of strong competitors will remain active after the transaction”. The deadline for an antitrust investigation by US authorities has also expired. In addition, both Nokia and Alcatel-Lucent confirmed that they have received further antitrust clearances from Albania, Canada, Colombia and Russian Federation. However, Nokia’s shareholders are yet to approve the transaction.
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Shares of Nokia surged 7.8 percent while Alcatel gained 5.7 percent, having slumped 20 percent and 27 percent respectively in the past three months against a 20 percent fall for Ericsson.
Téral says that if Nokia and Alcatel-Lucent had to fend for itself as a subscale player in this fiercely competitive market, “there would have been casualties down the road starting next year”. “There are no signs that the financial results of the companies are diverging in Alcatel-Lucent’s favour, so there is little chance that the terms of the deal are renegotiated”.
Alcatel-Lucent’s second-quarter sales were slightly lower than expectations but operating profit and margins topped consensus, as a focus on cost cuts offset weaker U.S. demand. Out of the total, Verizon and AT&T jointly contributed more than 25%. The combined company will be called Nokia Corporation, with headquarters in Finland and a strong presence in France.
The merged entity can effectively capitalize on the emerging Internet-of-thing (IoT) platform and offer triple-play voice, video and data solutions throughout the world. Nokia boasts strong technical efficiency in professional managed services, customer experience management together with a rich portfolio of mobile broadband infrastructure and 4G LTE networks.
Alcatel-Lucent holders will get 0.55 shares in Nokia for every Alcatel-Lucent, ending up with 33.5 percent of the enlarged group.
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