Nokia, Al­ca­tel in merger talks

Los Angeles Times - - BUSINESS - By James F. Peltz james.peltz@la­times.com

The ri­val tele­com equip­ment providers say they are in “ad­vanced” talks to com­bine.

Nokia is in “ad­vanced dis­cus­sions” to merge with Al­ca­tel-Lu­cent, a ma­jor ri­val in pro­vid­ing net­work equip­ment for mo­bile phones and other telecom­mu­ni­ca­tions gear, the com­pa­nies said Tues­day.

The an­nounce­ment con­firmed months of mar­ket spec­u­la­tion that Fin­land-based Nokia would com­bine with all or part of Al­ca­tel-Lu­cent, which is based in France.

The multi­bil­lion-dollar com­pa­nies in­di­cated that the deal would in­volve ex­chang­ing Nokia stock for shares of Al­ca­tel-Lu­cent, but they cau­tioned “there can be no cer­tainty” that their talks would re­sult in a merger.

Still, their chief ex­ec­u­tives — Ra­jeev Suri of Nokia and Michel Combes of Al­ca­tel-Lu­cent — met Tues­day with French Pres­i­dent Fran­cois Hol­lande at the El­y­see Palace in Paris, an in­di­ca­tion that a deal might be im­mi­nent.

Al­ca­tel-Lu­cent’s stock jumped in re­sponse to the an­nounce­ment, gain­ing 58 cents, or 13.3%, to $4.93 a share.

Nokia’s stock fell 34 cents, or 4.1%, to $7.96.

Once known as a lead­ing maker of cell­phones, Nokia now fo­cuses on tele­com net­work­ing equip­ment and dig­i­tal map­ping ser­vices. Its rev­enue was $13.6 bil­lion last year, based on cur­rent ex­change rates.

Nokia sold its hand­set and re­lated ser­vices busi­ness last year to Mi­crosoft Corp. for about $6 bil­lion.

Al­ca­tel-Lu­cent like­wise pro­duces large-scale equip­ment for mo­bile net­works and com­put­ing, and it posted 2014 rev­enue of about $14.1 bil­lion.

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