Full SDxCentral coverage of the megamerger:
Nokia-Alcatel Deal Could Push Ericsson Into M&A Mode
Nokia Confirms Talks To Buy Alcatel-Lucent
The deal’s biggest implications are in the mobile network. Together, Nokia and AlcaLu hold a 29 percent market share in mobile radio access network equipment, as measured by revenue, according to data from market research firm Dell’Oro Group (see chart below). Ericsson and Huawei held respective market shares of 33 percent and 24 percent last year.
But as analysts noted yesterday, Nokia would also gain AlcaLu’s router franchise and optical networking business. This could put pressure on Ericsson to make an acquisition in one of those areas.
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The combined company will officially be called Nokia Corporation (though we voted for NokAlu), with current Nokia CEO Rajeev Suri remaining on as boss at the company’s Finland headquarters.
AlcaLu, currently based in Paris, will retain a “strong presence” in France, Nokia said in a statement. But job cuts will likely come to the combined companies‘ more than 102,600 employees, with Nokia announcing plans to slash €900 million ($954 million) in annual operating costs by 2019.
French governmental scrutiny over job cuts may have been the massive deal’s final hurdle, with Paris reportedly demanding strong protections for AlcaLu’s roughly 6,000 France-based jobs. The ink came only after French President François Hollande personally met with Nokia CEO Rajeev Suri and AlcaLu CEO Michel Combes at the Élysée Palace in Paris on Tuesday.
Nokia’s concessions to France included commitments to maintaining R&D sites at Villarceaux and Lannion, and a pledge to create a €100 million venture fund devoted to backing French technology start-ups.
The deal is expected to close in the first half of 2016.
Craig Matsumoto contributed reporting. This post has been updated with additional information.