Nokia, Alcatel-Lucent Deal Approved by European Regulators
The $16.6 billion deal that would create a larger networking vendor clears an antitrust investigation by the European Commission.Nokia's $16.6 billion bid to buy Alcatel-Lucent got a significant boost when European Union antitrust regulators gave their approval to the deal. The European Commission ruled July 24 that while both vendors sell equipment and services to telecommunications companies, the acquisition doesn't raise antitrust concerns because Nokia and Alcatel-Lucent are not close competitors and there are other strong companies—such as Ericsson, Huawei Technologies, ZTE and Samsung—in the global market. The OK from the European Union (EU) is an important step forward for the deal, which was announced in April after more than two years of speculation and on-again, off-again talks. It also comes a month after the U.S. Department of Justice granted the networking vendors early termination of the United States' antitrust waiting period, which gave Nokia the go-ahead to proceed with the deal. Nokia also has received antitrust clearance from an array of other countries, including Brazil, Canada, Russia, Serbia and Colombia. Nokia shareholders also have to approve the deal, which is expected to close in the first half of 2016.
The acquisition will bring together two companies that have been in transition, from Nokia shedding its networking partnership with Siemens to Alcatel-Lucent going through yet another restructuring since the merger of Alcatel and Lucent in 2006, this one called the Shift Plan. It also will create a new company that in 2014 had a combined $27.5 billion in sales and $2.45 billion in profits, more than $5 billion in R&D (including funding for Bell Labs and Nokia's FutureWorks program) and net cash of almost $7.9 billion. Nokia officials said the company's addressable market will increase by 50 percent, to more than $138 billion.