It seems that Nokia is one company that can’t stay put. Just after being divested of its smartphone, but not tablet, business by Microsoft, the company is on the move again to redefine itself and focus its resources. Once a mobile device company, Nokia now wants to move forward as a network technology company. And to push through its plans, it will be acquiring French rival Alcatel-Lucent. The combined power of the two companies is envisioned, at least by Nokia, to boost R&D on future technologies like 5G, cloud computing, and, of course, the Internet of Things.
There has already been talk about the relationship and rivalry between Nokia and Alcatel-Lucent but, given the recent setbacks that the Finnish company experience, it was first speculated that Alcatel-Lucent would actually buy out Nokia. Instead, the reversed happened and Nokia will be giving out 0.55 of its own shares for every Alcatel-Lucent share. In effect, Nokia is buying Alcatel-Lucent for 15.6 billion EUR, or roughly $16.6 billion.
This would see Nokia go back to its roots, not with boots, but with network equipment and technology, before it started focusing on mobile phones. This area of Nokia’s business is one that not been touched, at least not directly, by Microsoft, so Nokia pretty much has free reign on where it wants to take it. Making smartphones and tablets are still grey areas.
Only Nokia and Alcatel-Lucent have agreed to the transaction. It will still have to pass through various approvals, including regulatory bodies. Nokia does expect that all of these should be done within the first half of 2016.
In the meantime, Nokia also admitted that it is mulling over what to do with HERE Maps. There has been talk that the company is considering selling it off. Now it is officially saying that it is reviewing the business, which may or may not lead to a transaction. That said, given that they are even considering the matter implies that HERE probably has very little relevance in Nokia’s new found focus.