Cash-rich Nokia may purchase Alcatel unit
STOCKHOLM: Nokia Oyj's sale of its handset business is clearing the way for a euro2 billion (RM8.7 billion) takeover of Alcatel-Lucent SA's wireless network-equipment unit.
With Nokia receiving euro5.44 billion next year for selling its handset unit to Microsoft Corp, the company's cash is set to exceed euro14 billion, its highest balance on record and the eighth-most among non-finance companies in Europe, according to data compiled by Bloomberg.
At the same time, Alcatel-Lucent chief executive officer Michel Combes is accelerating plans to scale down, including selling assets, to help the unprofitable French company survive.
"This deal makes complete sense," Sami Sarkamies, a Helsinki-based analyst at Nordea Bank AB, said in a phone interview.
"Nokia will have the financial flexibility to do this kind of deal and Alcatel needs to slim down. There is a relatively high likelihood of this deal happening."
Nokia has evaluated options, including a combination with Alcatel-Lucent's mobile-phone networks business, a person with knowledge of the matter said last month.
An acquisition would open the United States market to Nokia, helping the Finnish company shrink the gap with market leader Ericsson AB. Bloomberg