Finnish telecommunications giant Nokia has announced its acquisition of Infinera, a prominent provider of open optical networking solutions and optical semiconductors. The acquisition, valued at $2.3 billion, marks a significant step towards expanding Nokia’s footprint in the lucrative North American market and strengthening its position in the global optical networking sector.
Under the terms of the agreement, Nokia will pay $6.65 per share for Infinera, representing a substantial premium of 28% over Infinera’s closing share price on June 26, 2024. The transaction will be predominantly cash-based, with Infinera shareholders having the option to receive up to 30% of the consideration in the form of Nokia’s American Depositary Shares (ADSs).
Nokia’s leadership, including President and CEO Pekka Lundmark and Network Infrastructure President Federico Guillén, expressed confidence in the strategic synergy between the two companies. They foresee the acquisition accelerating Nokia’s path to achieving a double-digit operating margin in its Optical Networks business and targeting EUR 200 million in net comparable operating profit synergies by 2027.
“This acquisition is pivotal in strengthening our optical business pillar, enhancing our technological capabilities, and broadening our growth opportunities across various customer segments,” stated Federico Guillén. The move underscores Nokia’s commitment to enhancing its competitiveness and expanding its technological leadership in the optical networking domain.
With regulatory and shareholder approvals pending, Nokia anticipates completing the acquisition by the first half of 2025. This strategic alignment between Nokia and Infinera is poised to create substantial value for shareholders and reinforce Nokia’s position as a global leader in optical networking solutions.
By integrating Infinera’s expertise in optical semiconductors and networking equipment with its own capabilities, Nokia aims to drive innovation, accelerate product development, and better serve the evolving needs of its global customer base, particularly in the rapidly growing webscale segment of the market.
The acquisition also reflects Nokia’s proactive stance in leveraging inorganic growth opportunities to solidify its market position and capitalize on the burgeoning demand for advanced optical network solutions worldwide.