Nokia, a leading technology company, has recently announced plans to acquire US semiconductor company Infinera for 2.3 billion dollars. This move is expected to boost its profitability and solidify its market position in optical networks, particularly in North America. The deal is estimated to increase Nokia’s earnings per share by at least ten percent.
According to CEO Pekka Lundmark, the businesses of Nokia and Infinera are complementary in terms of customers, markets, and technologies. This will lead to significant added value for shareholders. The acquisition will be financed through Nokia’s cash resources, with at least 70 percent of the purchase price paid in cash and the rest in shares.
The goal of this acquisition is to accelerate the development of new products and solutions, strengthen Nokia’s technology leadership, and open up new business opportunities, especially among internet companies. Infinera will be merged into Nokia’s network infrastructure business group with the aim of growing the group’s turnover annually and improving profitability.
Nokia expects the acquisition to generate 200 million euros in synergy benefits in comparable operating profit by 2027. These benefits will come from savings in procurement and manufacturing costs as well as reductions in operating costs through product range changes and efficiency improvements in supply chain management.
Overall, this deal between Nokia and Infinera is expected to have a positive impact on both companies, allowing them to innovate faster, respond to customer needs more effectively, and capitalize on the growing demand for optical solutions in the telecommunications industry.