Nokia about to buy Alcatel-Lucent

nokia-in-advanced-talks-to-acquire-alcatel-lucents-wireless-business-reportsNokia has announced that it is in talks to buy Alcatel-Lucent.

The deal could create a European telecoms equipment group worth over $42.16 billion, if the regulators love it of course.

A purchase of Alcatel-Lucent by Nokia could cause problems in France. French officials have promoted the idea of creating pan-European giants to compete globally, in the model of Franco-German aerospace firm Airbus. But Alcatel-Lucent is also a major employer and symbolic of French industry.

One French government official said that any deal involving Alcatel-Lucent would likely have to be structured to keep a significant French influence in the new company for the deal to pass muster in Paris.

Such a deal would put the fear of God into the market leader Ericsson

In a joint announcement, the pair said “there can be no certainty at this stage that these discussions will result in any agreement or transaction.”

The deal currently under consideration is a “full combination” that would entail Nokia making a public offer for Alcatel-Lucent stock, the companies said. The deal could still fall apart, they added.

It isn’t clear if the parties have agreed on a valuation. Alcatel-Lucent’s market capitalization stands at roughly $11.63 billion, while Nokia’s market capitalization is about €28 billion.

Talk about a merger has been going on for years.  Many have considered a good idea as it would reshape the telecommunications-equipment business by creating a company with a combined 2014 revenue of €25.9 billion and more than 100,000 employees in businesses spanning wireless communications and Internet routing.