- Shareholders vote in favor of takeover of French network rival
- Combination makes Nokia a bigger rival to Ericsson, Huawei
Nokia Oyj shareholders gave a green light to the planned $17.6 billion acquisition of France’s Alcatel-Lucent SA, moving one step closer to completing a deal that will double its size and make it one of the biggest makers of network equipment.
Investors meeting in Helsinki Wednesday approved the purchase of the Paris-based rival that’s a key supplier of the Internet protocol-based networks and cloud software that enables data to travel more efficiently. Nokia still needs more than half of Alcatel investors to tender their shares for the deal to be completed in the first quarter as projected.
The acquisition doubles Nokia’s size to almost 110,000 workers, boosting its scale in mobile-networking equipment and providing access to Alcatel’s IP routing products, cloud software assets and greater scale in research and development. These segments are crucial as Nokia reshapes the company to compete with Sweden’s Ericsson AB and China’s Huawei Technologies Co. Nokia sold its unprofitable phone business to Microsoft Corp. last year and reached a deal to sell its maps unit to a group of German carmakers.
The market is consolidating as the demand for wireless-network equipment stagnates and companies seek cheaper and faster ways to move data in their systems. Seven months after Nokia unveiled the Alcatel takeover plan, Ericsson and Cisco Systems Inc., the largest maker of Internet-network gear such as routers and switches, said they would partner to combine their wireless and Internet-network capabilities to increase sales.
Nokia shares rose 2 percent to 7.11 euros at 5.57 p.m. in Helsinki, up 8.3 percent this year and valuing the company at about 28 billion euros ($30 billion).