Nokia to acquire Infinera for $2.3 billion to boost optical network business

Finnish telecom giant Nokia has announced that it will acquire optical transmission equipment provider Infinera for $2.3 billion USD.

The deal price will be $6.65 per equity share, a 28% premium to Infinera's closing price on June 26.

Nokia said that at least 70% of the consideration will be paid in cash, and the acquiree firm's shareholders can vote to receive up to 30% in the form of Nokia's American depositary shares (ADSs).

"Nokia and Infinera see a significant opportunity in merging to improve scale and profitability, enabling the combined business to accelerate the development of new products and solutions to benefit customers. The transaction aligns strongly with Nokia's strategy, as it is expected to strengthen the company's technology leadership in optical and increase exposure to webscale customers, the fastest growing segment of the market," the company said in a statement.

Following the acquisition, the telecommunications company expects a double-digit operating margin in its optical network business and EUR 200 million of net comparable operating synergies by 2027.

Nokia to acquire Infinera deal: Key highlights

• Will increase Nokia's in-house technology capabilities in optical business
• Strengthen the company's optical position in North America
• The company targets net comparable operating profit (NCOP) synergies of EUR 200 million by 2027.

Pekka Lundmark, President and CEO of Nokia, said, "In 2021 we increased our organic investment in Optical Networks with a view to improving our competitiveness. That decision has paid off and has delivered improved customer recognition, strong sales growth and increased profitability. We believe now is the right time to take a compelling inorganic step to further expand Nokia's scale in optical networks".

San Jose-based Infinera produces optical semiconductors and networking equipment used in the fixed-line and mobile telecommunications networks market.