Proactive Investors - Nokia (HE:NOKIA) has inked an agreement to acquire Infinera Corp for $2.3 billion to expand its optical network business, particularly in North America.
The acquisition of the US optical networking gear maker would make Nokia the second largest optical networking vendor with a 20% market share, trailing Huawei.
The deal, priced at $6.65 per share, represents a 26.4% premium to Infinera's previous closing price. Nokia will pay at least 70% in cash, with Infinera shareholders able to receive up to 30% in Nokia's American Depositary Shares.
Expected to boost Nokia's earnings per share in the first year post-closure, the deal will add over 10% to profits by 2027.
The acquisition enables Nokia to expand its sales to tech giants like Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT), who are heavily investing in data centers.
CEO Pekka Lundmark highlighted the strategic timing and significant exposure to data centers as key benefits. Infinera's strength in intra data center communications, a rapidly growing market segment, adds value to Nokia's portfolio.
Nokia said it anticipates saving €200 million in costs post-acquisition closure next year.