With an eye toward capitalizing on the Internet of Things (IoT) and cloud service markets, Nokia and Alcatel-Lucent are pursuing a merger. The memorandum of understanding states that Nokia will make an offer for all of Alcatel-Lucent’s equities (valued at approximately $16.6 billion), with the new company to be called the Nokia Corporation.
According to Adam Ewing and Marie Mawad at Bloomberg:
The takeover lets Nokia add products used to transmit landline and Internet traffic, giving it a more complete offering to sell to carriers as the amount of data traveling on networks increases with the popularity of Netflix and other video and music services. Devices from cars to refrigerators are also getting connected to wireless networks.
This will allow the Nokia Corporation to uniquely position itself in order to help telecom operators, internet players, and large enterprises.
The company will direct its efforts toward the United States, China, Europe, and Asia-Pacific, focusing on fixed and mobile broadband, IP routing, core networks, and cloud applications and services. Risto Siilasmaa will serve as chairman and Rajeev Suri as chief executive officer. The Nokia Corporation’s headquarters will be established in Finland, with the firm also maintaining a strong presence in France. The transaction is expected to close in the first half of 2016.