Nokia Corporation (NYSE:NOK) and Alcatel Lucent SA (NYSE:ALU) received a green signal from the European Union commission on Friday to go forward for the merger. EU regulators think that the merger doesn’t pose a major competitive risk.
CEO at Alcatel, Michel Combes stated in an interview that the deal could close earlier than expected. Combes also said that the deal with Nokia is essential, as this would help the company in getting much-required financing for 5G wireless infrastructure. He added that rivals are boosting their efforts to get their products prepared as early as possible, while 5G is still to go mainstream. The executive thinks that prototypes may start arriving as soon as 2018.
Combes will resign from his position once the deal is completed. Chief Executive Officer at Nokia, Rajeev Suri will take the helm of the combined company. Combes reminded there was time when two chiefs were running Alcatel at a time, though that proved unsuccessful and the company finished up close to liquidation.
ALU and NOK are presently considered as the weaker companies in the telecommunication equipment industry. Nokia has been gearing up to make acquisitions in order to lower the number of competitors and strengthen its foothold in newer markets. A couple of months ago, Nokia revealed that it is acquiring France-based Alcatel in a transaction valued at $17.12 billion under an all-share agreement. The current market cap of Alcatel is roughly $10.4 billion.
Alcatel (ALU) has a strong foothold in Europe that will supplement strong position of Nokia (NOK) in North America. The joint company will look to take on competitors including Huawei and Ericsson and many other. The transaction is expected to be equally fruitful for the two companies, though analysts think that the integration may take a bit longer to bear fruit.
