Nokia and Alcatel tie up

Nokia and Alcatel have joined hands with each other to generate revenues of $28 billion, with Asia-Pacific, Japan and India (APJ/India) contributing 18%. The annual revenue of Nokia in 2014 fiscal was Euro12.7 billion, with 26% coming from APJ/India, whereas Alcatel-Lucent’s revenue in 2014 stood at Euro13.2 billion, with 10% (about Euro1.3 billion) flowing from APJ/India.

If the deal goes through, the firm’s combined revenue base will hit Euro 26 bn, with APJ/India contributing 18% or Euro 4.7 bn (about $5 billion or close-to Rs.31,300 cr). The two firms announced that the deal is likely to be completed in the first half of 2016 and will result in Euro900 mn of operating cost savings by 2019-end. This can be a good deal, since Lucent Technologies acquired Ascend Communications for about $21 bn in 1999 and can be compared with Alcatel’s 2006 purchase of Lucent for $13.4 bn. It will be bigger than Nokia’s acquisition of map provider Navteq for about $8 bn in 2008.