Nokia announced the completion of its acquisition of Infinera. This San Jose based company has become part of Nokia, effective from the date of the transaction’s closure.
This acquisition brings together two innovative leaders, both with a history of industry firsts. Through the acquisition, Nokia will create a massive optical networking giant to accelerate its product roadmap and further expand Nokia’s ability to help network operators (whether they are service providers, network extenders, or enterprises) unlock opportunities and meet the network and power demands of the artificial intelligence era.
“I am pleased that we have been able to quickly and successfully complete the acquisition of Infinera, “said Pekka Lundmark, President and CEO of Nokia.” This transaction will significantly increase our scale and profitability in the field of optical networks, and enable us to accelerate our innovation pace to meet the requirements of the artificial intelligence era. The acquisition of Infinera will accelerate our growth strategy in data centers and strengthen our influence with customers in North America and network scale.”
Federico Guill é n, President of Nokia Network Infrastructure, said, “The speed at which this transaction was approved is very positive for Nokia, as it has received strong support from our customers. While welcoming our new colleagues and the talent and expertise they bring, we are creating a new organization that will be a leader in innovation, providing a wide range of optical network technology capabilities and building on Nokia Bell Labs’ cutting-edge research. Innovation benefits from scale, and the expansion brought about by the acquisition means we will be able to bring more to our customers faster.”
The Infinera team will join Nokia’s optical networking business led by James Watt, Vice President and General Manager of Nokia. Meanwhile, Infinera CEO David Heard will join Nokia’s Network Infrastructure Business Group as NI Chief Strategic Growth Officer. In this position, he will assist in developing and overseeing the implementation of business group growth plans, including specific customer segmentation strategies, product and market combinations, as well as market entry methods for the entire business group.
“I am delighted to welcome David Heard to Nokia and Network Infrastructure. His extensive experience in technology and business strategy implementation will play a leading role in helping our business group seize market opportunities and achieve our ambitions in all markets and business areas.”
Heard stated, “From the strong growth in network scale to the success of service providers in metropolitan, long-distance, and underwater networks, the mature achievements of the Infinera team are an ideal complement to Nokia’s recognized leadership and innovation in optical networks. I am delighted to see the broad opportunities brought by this new chapter and its significance for Nokia and its network infrastructure business. I am also delighted to join the Nokia team and help accelerate Nokia’s growth in all customer areas worldwide.”
The merged company has over 1000 customers worldwide, and its solutions provide support to some of the world’s largest operators as well as leading organizations in vertical fields such as enterprise, utilities, government, research, and education.
Embracing the challenges of the era of artificial intelligence
With the enormous new demands placed on data centers by artificial intelligence and cloud computing, data centers are at a turning point. To overcome these challenges, new thinking is needed on data center technology, emphasizing the critical task aspects of network technology.
Nokia’s network infrastructure product portfolio applies the same critical task standards to customers in various fields, from service providers to network extension providers, and to organizations in various industries. In terms of reliability, security, sustainability, as well as capacity, flexibility, and manageability, Nokia guides its innovation efforts to data center builders and users, including server to server connections within data centers, to support the growing demand for new artificial intelligence workloads.
The collaborative target of 200 million euros has been reconfirmed
On June 28, 2024, Nokia and Infinera announced that the two companies had signed a final agreement, under which Nokia would acquire Infinera at a price of $6.65 per share. Shareholders could choose cash, Nokia stock, or a combination of both, and adopt a proportional mechanism to limit Nokia stock issuance to around 30% of the total consideration paid to Infinera shareholders. All Nokia stocks will be issued to Infinera shareholders in the form of American Depositary Shares.
Nokia announced at the time and confirmed again today that the transaction is expected to increase Nokia’s comparable operating profit and earnings per share by 2025. Nokia’s goal is to have a comparable net operating profit synergy of over 200 million euros by 2027, which will gradually strengthen over three years. This transaction is expected to bring comparable earnings per share growth of over 10% in 2027.