Nokia shareholders have overwhelmingly approved the acquisition of ailing French telecom Alcatel-Lucent, removing one of the last hurdles to the EUR 15.6 billion (roughly Rs. 1,10,240 crores) deal that will make the Finnish company a market leader in networks.
The authorisation for the Nokia board to finalise the takeover came at an extraordinary general meeting Tuesday following last month’s launch of a public exchange offer for all outstanding Alcatel shares. In October, Nokia said it would pay EUR 4 billion to shareholders as the company raised its outlook for the year.
CEO Rajeev Suri said he was delighted by shareholders recognizing the “long-term value creation opportunity” of the deal, expected to close during the first quarter of 2016.
After the approval, the last remaining step for the Finnish group is to conclude its public exchange offer, under which it has asked Alcatel-Lucent’s shareholders to swap their stakes, offering 0.55 Nokia shares for each Alcatel-Lucent share.
The acquisition will allow Nokia to expand from telecom networks to Internet networks and ‘cloud’ services to better compete with its global rivals, the Swedish group Ericsson and Huawei of China.
“The combined company would lead in key geographies like North America and China… Our innovation capabilities will be massive, with an annual spending of EUR 4.7 billion ($5 billion or roughly Rs. 3,352 crores),” Nokia chief executive Rajeev Suri said in mid-November.
“In our opinion it makes sense. Of course every transaction has its difficulties and it won’t be easy but clearly it will bring the benefits of size,” Nordea’s Tammela said.
Nokia hopes to close the deal in the first quarter of 2016.
Written with agency inputs