Nokia to Acquire Infinera for $2.3B

Nokia has reached an agreement to acquire Infinera in a transaction valuing the company at $6.65 per share, or an enterprise value of $2.3 billion. The transaction will boost Nokia’s position in optical technologies and increases its exposure to webscale customers, both of which have been strategically targeted by Nokia.

News of the deal comes amid the forecasted and already-ongoing AI boom, necessitating optical network scale-up and the sustained development of optical communications technology. The combination is expected to increase the scale of Nokia’s Optical Networks business by 75% and allow it to accelerate its product roadmap timeline and breadth, the company said. Specifically, the acquisition expands Nokia’s expertise in digital signal processor development, silicon photonics, and indium phosphide semiconductor materials sciences, and provides deeper competency in photonic integrated circuit technology.

The acquisition is also expected to accelerate Nokia's strategic goal of diversifying its customer base and growing in enterprise, particularly by addressing webscale and AI market opportunities. Internet content providers make up more than 30% of Infinera's sales and its presence in the North American optical market represents approximately 60% of its sales, which improves Nokia’s optical scale in the region, and complements Nokia’s positions in the Asia-Pacific regions (excluding China), Europe, Middle East, Africa, and Latin America. Infinera's recent wins in in-line systems and pluggables, as well as in the development of high-speed, low-power optical components for intra-data center applications suited for AI workloads, provide the combined business with a strong position in burgeoning market areas, according to the companies.

Nokia targets to achieve EUR €200 million (~$214 million) of net comparable operating profit synergies by 2027, and that the transaction, along with the recently announced sale of Submarine Networks, will create a reshaped network infrastructure. This infrastructure, the company detailed, is to be built on three pillars: fixed networks, IP networks, and optical networks.

The transaction will be split between at least 70% cash and up to 30% stock. The deal has been approved by the boards of both Nokia and Infinera and is targeted to close during the first half of 2025, subject to approval by Infinera’s shareholders, regulatory approvals, and other customary closing conditions.