Nokia has agreed to buy Alcatel-Lucent in an all-stock deal that puts Alcatel-Lucent’s worth at EUR 15.6 billion. The two companies employed a total of 40,000 R&D personnel and spent EUR 4.7 billion on R&D in 2014, and in combination will be in a position to focus on 5G, IP and software-defined networking, cloud computing, data analytics, and sensors and imaging.
Rajeev Suri, president and chief executive officer of Nokia, said, “Together, Alcatel-Lucent and Nokia intend to lead in next-generation network technology and services, with the scope to create seamless connectivity for people and things wherever they are.
“Our innovation capability will be extraordinary, bringing together the R&D engine of Nokia with that of Alcatel-Lucent and its iconic Bell Labs. We will continue to combine this strength with the highly efficient, lean operations needed to compete on a global scale.
“We have hugely complementary technologies and the comprehensive portfolio necessary to enable the Internet of Things and transition to the cloud. We will have a strong presence in every part of the world, including leading positions in the United States and China.”
Michel Combes, chief executive officer of Alcatel-Lucent, added, “A combination of Nokia and Alcatel-Lucent will offer a unique opportunity to create a European champion and global leader in ultra-broadband, IP networking, and cloud applications. I am proud that the joined forces of Nokia and Alcatel-Lucent are ready to accelerate our strategic vision, giving us the financial strength and critical scale needed to achieve our transformation and invest in and develop the next generation of network technology.
“This transaction comes at the right time to strengthen the European technology industry. We believe our customers will benefit from our improved innovation capability and incomparable R&D engine under the Bell Labs brand. The global scale and footprint of the new company will reinforce its presence in the United States and China.”
Suri will serve as CEO of the combined company, which will be headquartered in Finland and retain the Nokia name. The Wall Street Journal reports that the two companies wanted to avoid a so-called merger of equals where both sides try to maintain control. The Journal adds that Nokia would maintain headcount in France in accordance with levels Alcatel agreed to 18 months ago, and that it would add 500 research staffers over four years. Nokia said it intends to invest EUR 100 million in French startups.
The Journal presents a timeline tracing the lineage of the combined company back to the formation of Nokia AB in 1865, the establishment of Western Electric Manufacturing Co. in 1872, and the founding of CGE by a French engineer in 1898.
Nokia, the Journal notes in a slideshow, was founded as a wood-pulp mill company. In a 1967 merger it entered the rubber products and telephone and power cable markets. In 1982 it debuted the world’s first car phone. View the timeline and slide show here (subscription required).
