Nokia to Buy Infinera for $2.3B
By Dan Robinson, The Register
June 28, 2024
Nokia is set to buy optical networking biz Infinera in a $2.3 billion transaction, the companies have confirmed.
The Finnish networking giant says it has a definitive agreement to acquire California-based Infinera to increase its scale in optical networking and accelerate its own product roadmap.
The sale is expected to close during the first half of 2025, subject to regulatory approval and getting the nod from Infinera's shareholders. At $2.3 billion, the expenditure is said to represent a premium of 28 percent over Infinera's share price at the point the takeover was announced.
Nokia is already one of the world's largest telecoms infrastructure kit companies, but says it and Infinera both reckon that merging would provide greater economies of scale to boost profits.
The combined business will be able to speed the development of new products and services, Nokia believes, beefing up the company's standing in optical technology and drawing in more webscale customers, which it regards as the fastest growing segment of the market.
Nokia President and CEO Pekka Lundmark said that the company had already increased investment in optical networks, and this move would build on that: “The combined businesses have a strong strategic fit given their highly complementary customer, geographic, and technology profiles.”
This refers to the two companies currently having limited customer overlap, with Infinera bringing in about 60 percent of its sales from the North America market while Nokia's optical unit does most of its business in other regions. The merger is expected to boost Nokia's scale in America and bolster its tech in APAC, EMEA, and Latin America.
“We believe Nokia is an excellent partner and together we will have greater scale and deeper resources to set the pace of innovation and address rapidly changing customer needs at a time when optics are more important than ever – across telecom networks, inter-datacenter applications, and now inside the datacenter,” said Infinera chief David Heard.