Nokia has announced a definitive agreement to acquire Infinera, a global supplier known for its innovative open optical networking solutions and advanced optical semiconductors. The transaction values Infinera at $6.65 per share, translating to an enterprise value of approximately $2.3 billion. This acquisition is expected to have a significant impact on the industry, bringing together two giants to enhance their technological capabilities and market reach.
The acquisition represents a premium of 28% to Infinera’s share price at the close of June 26, 2024, and a 37% premium to the trailing 180-day volume weighted average price (VWAP). This premium reflects the strategic value and growth potential that Nokia sees in Infinera. At least 70% of the transaction consideration will be paid in cash, with Infinera’s shareholders having the option to receive up to 30% of the aggregate consideration in the form of Nokia American Depositary Shares (ADSs).
Nokia’s Board of Directors has also committed to increasing and accelerating the company’s share buyback program. This move is aimed at offsetting the dilution from the deal, demonstrating Nokia’s commitment to maintaining shareholder value while pursuing strategic growth opportunities.
The merger of Nokia and Infinera is expected to create a formidable player in the optical networking market. By combining their resources and expertise, the two companies aim to improve scale and profitability, accelerate the development of new products and solutions, and deliver enhanced value to customers. The transaction aligns strongly with Nokia’s long-term strategy to strengthen its technology leadership in optical networking and increase its exposure to webscale customers, who represent the fastest-growing segment of the market.
