Nokia ponders Alcatel-Lucent acquisition: report
Insiders claim approach possible for all or part of French rival’s operations
Nokia is considering asking Alcatel-Lucent for talks on a possible purchase of all or part of the French telecoms vendor's operations, following the sale of the Finnish company's devices unit and patents to Microsoft Corp, Reuters reported.
European telecoms equipment makers have been undercut by low-cost Chinese rivals Huawei and ZTE. While regional market leader Ericsson showed year-on-year increased profitability in the second quarter of this year, Nokia and Alcatel-Lucent have struggled to keep pace.
After Microsoft's announcement of the $7.3bn deal to buy Nokia's handset division, interim CEO Risto Siilasmaa began holding internal discussions on the future of the company.
Reuters quoted one unnamed insider as saying that Nokia was in a "period of reflection trying to figure out what they want to do". The source mentioned "the option to buy the entire Alcatel-Lucent, or just the wireless business ... Nothing is imminent".
Sources said that the Microsoft deal would have to conclude before any formal meetings could take place. The proceeds from the transaction are expected to elevate Nokia from a junk to investment grade rating.
After handover of its devices business Nokia will rely on its Nokia Solutions and Networks (NSN) division as its main source of income. Alcatel's wireless unit has a significant presence in the US market where NSN has not performed well, one of the sources said. If Nokia were to buy that part of the French company's operations, Alcatel-Lucent could focus on its growing IP routing and optical business.