Nokia to acquire optical network gear manufacturer in a $2.3bn deal

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The Finnish company, Nokia, us paying $6.65 per share, or $2.3 billion, for the optical networking vendor, Infinera.

In a press release, Pekka Lundmark, President and CEO of Nokia confirmed the acquisition at the weekend.

The Infinera deal represented a 28% premium with Nokia agreeing to pay Infinera’s stockholders a minimum of 70% in cash, with the option to receive up to 30% of the consideration in the form of Nokia American Depositary Shares (ADSs).

Nokia believed the acquisition of Infinera will quicken the company’s journey to a double-digit operating margin in its optical networks division.

It viewed the agreement as having strong financial and strategic merit. Nokia hopes to have achieved net comparable operating profit synergies of 200 million euros by 2027.

Lundmark stated, “In 2021 we increased our organic investment in Optical Networks to improve our competitiveness.

“That decision has paid off and has delivered improved customer recognition, strong sales growth and increased profitability.

“We believe now is the right time to take a compelling inorganic step to further expand Nokia’s scale in Optical Networks.”

The acquisition has received permission from the boards of both firms and it is anticipated to close in the first half of 2025.

Due to declining sales of 5G equipment, telecom equipment manufacturers have been searching for strategies to expand into new markets and into expanding industries like artificial intelligence.

When it comes to server-to-server communication within data centres, Infinera is particularly proficient in this area according to experts.

Lundmark stated that this will be one of the markets for communications technology that grows the fastest overall.

Earlier report stated that Nokia has announced that its CEO, Pekka Lundmark, had a phone conversation using a new technology known as “immersive audio and video,” which enhances the quality of a call with three-dimensional sound and makes interactions more lifelike.