Finnish technology company Nokia has agreed to acquire Infinera, a provider of open optical networking solutions and advanced optical semiconductors, in a cash and stock deal valued at $2.3bn (€2.15bn).
The purchase price of $6.65 per share reflects a 28% premium over Infinera’s share price on 26 June 2024, and a 37% premium to the 180-day volume weighted average price.
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Nokia expects the deal to bolster its optical networks business by 75%, expediting product development and expanding offerings.
The combined entity is anticipated to have substantial in-house capabilities, including a larger digital signal processor development team, and expertise in silicon photonics, indium phosphide-based materials, and photonic integrated circuit technology.
According to the announcement, Nokia and Infinera have very few shared customers, which strategically positions the combined business favourably on a global scale, except in China.
Infinera’s North American presence, accounting for approximately 60% of its sales, will bolster Nokia’s optical network scale in the region and complement its positions in APAC, EMEA, and Latin America.
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By GlobalDataThe merger is set to further Nokia’s strategic aim of diversifying its customer base and expanding into the enterprise sector.
Additionally, it is anticipated to yield €200m in net comparable operating profit synergies by 2027.
Nokia president and CEO Pekka Lundmark said: “In 2021 we increased our organic investment in optical networks with a view to improving 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 combined businesses have a strong strategic fit given their highly complementary customer, geographic and technology profiles.”
Infinera CEO David Heard said: “We believe Nokia is an excellent partner and together we will have greater scale and deeper resources to set the pace of innovation and address rapidly changing customer needs at a time when optics are more important than ever – across telecom networks, inter-data center applications, and now inside the data center.
“This combination will further leverage our vertically integrated optical semiconductor technologies. Furthermore, our stakeholders will have the opportunity to participate in the upside of a global leader in optical networking solutions.”
Earlier in February 2024, Nokia partnered with NVIDIA to integrate artificial intelligence and cloud radio access networks
