Nokia is acquiring U.S. optical networking specialist Infinera for $2.3 billion (about 2.15 billion euros). With this acquisition, Nokia aims to strengthen further and expand its fixed network portfolio, more specifically for optical networks.
The acquisition gives the Finnish network provider technology for optical networks. Infinera provides open standards-based optical networking solutions, optical networking components, and advanced optical processors. This technology is of great interest to telecom operators for strengthening their fixed backbone connections and also offers other customers fixed connectivity.
Range of benefits
The Finnish network provider indicates that Nokia, Infinera, and customers should benefit from the incorporation of Infinera. For example, the acquisition will allow Nokia to grow the scale of its optical networking business by 75 percent, especially in North America, accelerate its own product roadmap, and better compete with other vendors.
In addition, a larger team working on digital signal processors, more knowledge in areas such as silicon photonics, and scientific expertise in so-called “indium phosphide-based materials” for semiconductors will boost its own expertise. The merger of the companies will also further expand knowledge and experience in integrated photonic circuit technology.
Through the acquisition, Nokia can gain a stronger foothold with customers other than telecom operators and Internet service providers. Internet content providers, such as streaming services, also widely use Infinera’s technology.
Other details
Nokia announced that the Finnish network provider will pay 70 percent of the $2.3 billion acquisition amount in cash and the remaining 30 percent in treasury shares. Shareholders can opt for cash, Nokia shares, or a combination of both.
Depending on the reaction of shareholders and regulators, the deal should be finalized in the first half of 2025.
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