Nokia is set on acquiring Alcatel-Lucent’s wireless business and is already in advanced talks with the rival company about a potential deal, according to Bloomberg and the Financial Times (citing people familiar with the matter).
The Financial Times said that Nokia’s decision to buy assets from Alcatel “highlights its return to growth” and shows how the company wants to expand after Microsoft acquired Nokia’s handset business last year.
Last year Paris-based Alcatel’s wireless segment generated around $5 billion in revenues, accounting for 36 per cent of the company’s total sales.
Acquiring the wireless segment would give Nokia a significant boost in market share in the wireless infrastructure business.
Currently the Finnish company directly competes with Huawei and Ericsson to supply mobile equipment to network operators.
People familiar with the matter said that Nokia executives are trying to secure French state backing for a sale of the assets.
The deal would need to be approved by the French government. Francois Hollande’s government has tried to prevent corporate mergers in the past, however, officials are apparently working with advisors so that the deal will protect domestic research jobs.
Bloomberg said that no agreement has been reached and a deal could still fall apart.
Shares of Nokia and Alcatel increased on Monday following news of the potential deal.