Nokia chiefs described optical networks company Infinera as irresistible as the vendor lined up an acquisition with an enterprise value of $2.3 billion, its second shake up of its Networks Infrastructure business in the same 24-hour period.
The vendor expects the acquisition of Infinera to be a key driver towards a double-digit operating margin for its Optical Networks business, one of three units comprising a refreshed Networks Infrastructure division. Nokia highlighted benefits for its operations in North America, a region which was a weak point during Q1.
Nokia’s offer for Infinera is a 28 per cent premium on its closing share price on 26 June and comprises at least 70 per cent in cash and up to 30 per cent in stock.
The vendor noted 60 per cent of Infinera’s revenue comes from North America, adding the company will complement its position in the optical sector in APAC, EMEA and Latin America.
Pekka Lundmark, president and CEO of Nokia, said it believes “now is the right time to take a compelling inorganic step” to grow its optical capabilities, after committing to organic moves in 2021.
“The combined businesses have a strong strategic fit given their highly complementary customer, geographic and technology profiles”.
Federico Guillen, president of Network Infrastructure at Nokia, said the companies had “long respected each other as competitors”, but now “find the logic of combination irresistible”.
Gains
Nokia stated the scale of its Optical Networks business would be boosted by 75 per cent, with the acquisition offering the chance to accelerate product roadmaps and strengthen its competitive position in the sector.
It pointed to “significant” capabilities “including an expanded digital signal processor” development team, expertise in silicon photonics and “indium phosphide-based semiconductor material sciences”, along with greater proficiency in photonic integrated circuit technology.
Nokia aims to close the acquisition in H1 2025, subject to approvals by Infinera shareholders and regulators.
The post Nokia continues optical rejig with $2B move for Infinera appeared first on Mobile World Live.
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