ESPOO (dpa-AFX) - Nokia (NOK) has officially completed its acquisition of Infinera Corporation, a company based in San Jose, marking the integration of Infinera into Nokia's operations.
This acquisition merges two innovation leaders, establishing a dominant force in optical networks with the scale necessary to accelerate product roadmaps. The expansion enhances Nokia's ability to support network operators-spanning service providers, webscalers, and enterprises-in navigating the challenges and opportunities of the AI era.
Pekka Lundmark, President and CEO of Nokia, expressed satisfaction with the swift and successful completion of the acquisition. He highlighted that the transaction would significantly enhance Nokia's scale and profitability in optical networks while expediting innovation to meet AI-driven demands. He also emphasized that the acquisition would bolster Nokia's growth strategy in data centers and expand its presence in North America and among webscale customers.
Federico Guillén, President of Network Infrastructure at Nokia, noted the rapid approval of the deal and the strong customer support it received. He emphasized that the integration of Infinera's talent and expertise into Nokia would create an innovation-driven organization capable of delivering a broad spectrum of optical networking technologies. He further stated that the expansion, supported by Nokia Bell Labs' cutting-edge research, would allow the company to bring advancements to customers at a faster pace.
Following the acquisition, Infinera's team will join Nokia's Optical Networks business, led by Vice President and General Manager James Watt. Meanwhile, Infinera's CEO, David Heard, will assume the role of Chief Strategic Growth Officer within Nokia's Network Infrastructure business group. In this capacity, he will oversee the implementation of growth strategies, including customer segment strategies, product and market mix, and go-to-market approaches.
Guillén welcomed Heard to Nokia, acknowledging his extensive experience in technology and business strategy implementation. He stated that Heard's expertise would play a crucial role in helping the business group seize market opportunities and achieve its strategic objectives.
Heard recognized Infinera's success in various networking domains, from webscale growth to service provider solutions across metro, long-haul, and subsea networks. He highlighted that Infinera's accomplishments would complement Nokia's leadership in optical network innovation. Expressing enthusiasm about the expanded opportunities that the acquisition presents, he affirmed his commitment to driving growth across all customer segments worldwide.
The combined company, serving over 1,000 customers globally, will continue powering major network operators and organizations across industries such as enterprise, utilities, government, and research & education.
Addressing the AI Era Challenges
As AI and cloud technologies place increasing demands on data centers, innovative approaches to data center networking are required. Nokia's Network Infrastructure portfolio applies mission-critical networking principles across various sectors, including service providers, webscalers, and diverse industries. By focusing on reliability, security, sustainability, capacity, flexibility, and manageability, Nokia aims to provide substantial value to data center developers and users, particularly in intra-data center networking for AI-driven server-to-server connections.
Financial Synergies and Growth Targets
On June 28, 2024, Nokia and Infinera announced a definitive agreement under which Nokia would acquire Infinera for US$6.65 per share. Shareholders had the option to receive cash, Nokia shares, or a combination of both, with a proration mechanism limiting Nokia share issuance to approximately 30% of the total consideration. All Nokia shares issued to Infinera shareholders will be in the form of American Depositary Shares.
Nokia reaffirms that the acquisition is expected to enhance comparable operating profit and earnings per share (EPS) in 2025. The company maintains its target of achieving over EUR 200 million in net comparable operating profit synergies by 2027, with a gradual ramp-up over three years. The transaction is anticipated to result in over 10% comparable EPS accretion by 2027.
NOK is currently trading at $4.765 or 1.3472% lower on the NYSE.
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