Nokia in Talks to Acquire Alcatel-Lucent

nokia plus alcatel-lucentFinnish tech firm Nokia has confirmed it is in “advanced discussions” to acquire telecom equipment maker Alcatel-Lucent in a deal that would join together two of the mobile industrys weaker players to form a new player in the global networking space.

In a joint statement, the two companies confirmed that talks were occurring, but warned that there was “no certainty at this stage that these discussions will result in any agreement or transaction”.

There have been rumours for several years about the two firms combining, but the deal could still face political opposition and challenges in cutting costs for products that are already in use by global telecom operators.

A merger would elevate both companies, however, bringing them closer to rival firms like Swedens Ericsson and Chinas Huawei, both of which hold larger market shares and have seen better momentum in recent years. It would enable Nokia to expand its presence in the US market, where Alcatel-Lucent supplies operators AT&T, and could enable both firms to cut costs where there is crossover between the two.

However, the French government may step in to protect jobs at Alcatel-Lucent, with telecoms seen as a critical sector for the French economy and the government having recently strengthened its powers to block foreign takeovers.