Nokia wants to merge with Alcatel-Lucent after selling mobile phone business

Sina Science and technology news Beijing time, September 26 morning, according to Reuters reported in Wednesday, a number of sources said that after the sale of mobile phone business to Microsoft, Nokia is discussing whether with the French telecoms equipment manufacturers Alcatel-Lucent (hereinafter referred to as "Rung") merged. The source said Nokia did not start formal negotiations with rung. Nokia discussed whether to buy rung wireless services at the end of 2012 and said the two companies are still likely to return to the negotiating table, one of the sources said. Speculation that Nokia may have merged with Rung has surfaced a few years ago, with both sides facing market leader Ericsson (13.65, 0.16, 1.16%) and competition from Huawei and ZTE, the Asia's Low-cost network equipment maker. Microsoft announced September 3 that it would buy Nokia's mobile phone division at € 5.44 billion (about $7.3 billion). Nokia then said it would evaluate the remaining business development strategy before the deal was completed. Nokia's remaining business includes here Map software Department, network equipment business and a series of patent combinations. Nokia has once dominated the global handset market, but has been caught in the lurch by competition from Apple and Samsung. The source said Nokia had begun an internal discussion of a future strategy under the leadership of Chairman and interim CEO Lasma Risto Siilasmaa, but it could take several months to make a decision. Nokia's network equipment business, Nokia FX and NX and rung speakers declined to comment on the news. Mergers and acquisitions One source said that Nokia was "in a reflective phase, trying to find what it wanted to do". The options Nokia may take include "a wholesale takeover of rung or the acquisition of its wireless business", but the most likely scenario is the acquisition of the Rung Wireless division, which holds a large share of the US market, and Nokia has been vulnerable in this lucrative market. This means that rung will focus its business on rapidly growing IP Routing and fibre-optic services, the source said. The source also said that any formal dialogue on the merger could take place only after Nokia received revenue from the sale of its mobile phone sector. The revenue is expected to boost Nokia's financial position and raise its credit rating from "junk" to "investment-grade". The Nokia Solution and Network Division will become the company's main business unit, accounting for about 90% of its total sales, following the completion of the sale of the handset sector to Microsoft. Wireless sector valuation Analysts expect the Rung wireless business unit to be worth € 1.1 billion to 1.5 billion euros (about $1.49 billion to $2.03 billion). The company's share of the global wireless infrastructure market will rise from 18% to more than 30% if Nokia solutions and networks merge with rung, surpassing Huawei and closing in on Ericsson。 In order to meet consumer demand for high-speed mobile internet access services, the world's major telecom operators have been upgrading their infrastructure, but network equipment manufacturers have been faced with more or less pressure. This pressure brought a wave of mergers and acquisitions between 2006 and 2007, and rung and NSN networks were born in the wave. Nokia and Siemens established a joint venture Nokia Solution and Network in 2007, and Nokia acquired all of Siemens's shares by early July this year. The Nokia Solution and network announced in 2011 that the company will focus on the wireless network infrastructure to help the company rally. Since then, the company has cut more than One-fourth of its employees and has started contributing cash flows to Nokia by the end of 2012. Since 2006, rung has faced difficulties in making profits and creating cash flows. This June, rung, led by new CEO Michel Combes Michel Combes, announced a new restructuring plan. Industry insiders point out that Nokia is likely to be highly cautious before considering any offer to rung. The Combes is not in a hurry to conclude any deals because rung shares have risen about 130% per cent so far this year, sources said. In addition, there are other issues facing the prospect of a deal, such as a possible intervention by the French government to protect rung or limit layoffs. The French government currently holds 3.6% per cent of rung shares. In addition, Nokia may not be the only company interested in acquiring some of rung's assets. Other network equipment makers such as Juniper NX and Ericsson have recently been interested in acquiring rung or some of their assets, a source said, but the two companies declined to comment. (Tangfeng)