Nokia is set to buy Alcatel-Lucent for $16.6 billion in a move that will give it resources to compete globally against larger rivals such as Ericsson and China’s Huawei Technologies.Nokia will issue 0.55 shares of stock for every outstanding Alcatel-Lucent share, giving Alcatel-Lucent shareholders 33.5% of the merged company when the transaction is complete. Nokia shareholders will own 66.5 percent of the new outfit.
Though Nokia will remain its Headquarters in Finland, it will maintain strong research facilities in France and nominate a vice chairman from Alcatel-Lucent.
The acquisition of the ailing French telco which has been making losses will see Nokia emerge as a top network equipment manufacturer against the likes of Ericsson and Huawei. Nokia shofted focus to networks after selling its smartphone business to Microsoft.