NOK, ALU: Nokia to Buy Alcatel-Lucent for $16.6 Billion

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Nokia Corporation (NYSE:NOK) has agreed to acquire Alcatel Lucent SA (ADR) (NYSE:ALU) for $16.6 billion.

nokia-alcatel-lucent-nok-aluNokia’s purchase of Alcatel-Lucent would result in a larger company that could possibly better compete with other telecommunications equipment manufacturers. It could boost the new company above Huawei and make it the second largest telecommunications equipment manufacturer behind Ericsson (ADR) (NASDAQ:ERIC), reports The New York Times.

The deal between Nokia and Alcatel-Lucent is set to finish during the first half of 2016. NOK investors would control 66.5% of the new company’s stock and ALU investors would control the rest. The company is expected to start saving $1 billion a year in 2019, NYT notes.

The merger of Nokia and Alcatel-Lucent could provide the new company with a better chance in the telecommunications equipment market. While it may not give it as strong of a chance in the United States, it could make it a more serious competitor in other areas of the world. It could also help the company saves on costs when it goes to upgrade to 5G.

NOK shares were down 2% and ALU shares were down 18% as of Noon Wednesday.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/04/nokia-alcatel-lucent-nok-alu/.

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