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U.S. regulators have given their blessing to Nokia’s proposed acquisition of Alcatel-Lucent, according to the two companies.
The Department of Justice granted the networking vendors early termination of the United States’ antitrust waiting period, a move announced in April that will allow Nokia to proceed with the purchase of Alcatel-Lucent for $16.6 billion.
The acquisition still needs the approval of regulatory bodies in other regions, though Nokia and Alcatel-Lucent officials noted that the deal has gotten the OK from regulators in Brazil and Serbia. In addition, Nokia shareholders must approve the acquisition.
The companies expect to close the deal in the first half of 2016.
Officials with both vendors expect the merged company to be a significant competitor of larger networking companies, such as Ericsson, Huawei Technologies and Cisco Systems. The announcement that Nokia will buy Alcatel-Lucent came after almost two years of rumors and speculation. Together, Nokia and Alcatel-Lucent generated $27.5 billion in revenue last year and $2.45 billion in profit, and invested more than $5 billion in R&D.
The acquisition is getting some pushback from investment firm Odey Asset Management, which is Alcatel-Lucent’s second-largest shareholder. Odey officials reportedly told clients in a letter in April that Nokia’s offer greatly undervalues the France-based networking vendor and that they did not intend to tender their shares for the deal.
The planned acquisition reportedly also isn’t pressuring Ericsson to change its policy of investing in existing businesses and only buying smaller companies. In the wake of the Nokia-Alcatel-Lucent announcement, some industry analysts suggested that Ericsson might buy a larger company, such as Juniper Networks or Ciena. However, Rima Qureshi, the vendor’s chief strategy officer, told Reuters that company officials believe Ericsson can grow without making such a significant deal.
The decision came after a meeting of the company’s top 250 managers earlier this month to review where the industry now stands and Ericsson’s place in it.
“We have a very strong focus on core development,” Qureshi told the news organization. “We believe that the best approach, and the way we will go about it from a strategic perspective, is organic.”