China Approves Nokia's $17.6 Billion Acquisition of AlcatelBloomberg News
Nokia still needs French approval for Alcatel-Lucent purchase
Nokia expects deal to be completed in first half of 2016
China has given the green light to Nokia Oyj’s $17.6 billion takeover of French wireless-network rival Alcatel-Lucent SA, the last major antitrust approval needed before the acquisition can be completed next year.
The nod from China leaves France as the remaining hurdle for deal, which is meant to help Nokia broaden its product offering and reduce costs to take on Sweden’s Ericsson AB and China’s Huawei Technologies Co. Nokia expects to complete the deal in the first half of next year, it said Monday in a statement.
"It should not be an issue at all as Nokia has already taken firm employment engagement in France," said Sebastien Sztabowicz, an analyst at Kepler Cheuvreux who rates Nokia a buy. The next step will be the filing of the public exchange offer for Alcatel-Lucent securities and an approval from Nokia shareholders, he said Monday in a note.
Nokia Chief Executive Officer Rajeev Suri said last month the acquisition is progressing smoothly and he isn’t worried about winning approval from the French government. In an industry that’s seen its share of failed deals, Suri is leaning on his experience turning around Nokia’s networks unit as he prepares to take on more than 50,000 Alcatel-Lucent employees.
Suri has experience with successful takeovers and turnarounds. The executive saved Nokia’s networks unit from the brink of bankruptcy after a troubled combination with a Siemens AG business, and the division now boasts better profitability than bigger rival Ericsson. To do that, he had to deal with regulators and unions as he reorganized operations in about 90 countries.
Nokia, which is scheduled to report third-quarter earnings Oct. 29, has fallen about 6 percent this year in Helsinki trading and was up 0.3 percent at 6.19 euros at 4:48 p.m. local time, valuing the company at about 23 billion euros ($26 billion).
— With assistance by Clement Tan, and Adam Ewing