PARIS-- Nokia Corp. has sealed an agreement to buy rival
telecommunications-equipment firm Alcatel-Lucent in an all-stock
deal that values the French company at EUR15.6 billion ($16.6
billion), the companies said Wednesday.
The deal caps months of negotiations between the two firms,
backed by the French government, and years of speculation that
Europe's two smaller network-gear makers would eventually need to
team up to have enough resources to compete globally against larger
rivals including Sweden's Ericsson and China's Huawei
Technologies.
Under the agreement, which was approved by both companies'
boards, Nokia will issue 0.55 shares of stock for every outstanding
Alcatel-Lucent share, giving Alcatel-Lucent shareholders 33.5% of
the merged company when the transaction is complete. The companies
say they expect to close the deal in the first half of 2016.
After completion, Nokia will remain based in Finland under
existing Chairman Risto Siilasmaa and Chief Executive Rajeev Suri,
the firms said in a statement. The company said it will maintain
strong research facilities in France and nominate a vice chairman
from Alcatel-Lucent.
The deal brings together two industrial icons of their
respective countries, each of which had in recent years been laid
low by corporate missteps and intense competition. After the sale
of its struggling handset division to Microsoft Corp. in 2013, this
deal will help seal Nokia's pivot to a global provider of network
technology, giving it access to lucrative Alcatel-Lucent client
relationships in the U.S. and a suite of Internet-routing
technologies to complement its wireless gear.
"We will have a strong presence in every part of the world,
including leading positions in the United States and China," Mr.
Suri said in a statement.
Write to Sam Schechner at sam.schechner@wsj.com
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