Nokia confirmed Wednesday that it will buy Alcatel-Lucent, a deal that will create a telecom-supply giant and possibly spur a wave of consolidation in the industry.
The all-stock deal values the French firm at €15.6 billion ($ 16.6 billion). The combined company will be called Nokia Corporation, with headquarters in Finland.
Alcatel ( shareholders will be paid 0.55 )Nokia ( shares per Alcatel share, a 28% premium over the company’s three-month weighted stock price. )
Both firms provide equipment, infrastructure and support to the telecommunications industry. Alcatel shareholders will own 33.5% of the combined company.
The marriage between Nokia and Alcatel should give the combined company more clout when competing with rivals like Sweden’s Ericsson ( and China’s Huawei. )
Nokia, which sold its handset unit to Microsoft last year, has a market capitalization of about €27.7 billion ($ 29.5 billion). Alcatel is less than half the size, with a market value around €12.6 billion ($ 13.4 billion).
Nokia was once a giant in the mobile phone industry but was clobbered by Apple (Tech30) and , Samsung (. Nokia shares hit a peak in 2007 and then tanked. )