Nokia’s Bid To Acquire Infinera May Drive Further Industry Changes

On June 27, Nokia announced plans to acquire Optical Transport rival Infinera. The indicative bid was for $2.3B, representing a 37% premium to a six-month volume-weighted price. Additionally, Nokia plans to spin off its Submarine Networks business (which even today uses the historically French-domiciled Alcatel in its name) to a part of the French government. Nokia expects the deal to close in 1H25 and that by 2027, it will achieve earnings per share accretion. One could argue that Nokia is playing the long game, waiting around three years for the positive effects of the deal to accrue; on the other hand, the Optical Transport industry saw wild over-investing in its infancy 20-25 years ago, resulting in brutal competition. The team expects double-digit operating margins in its long-term Optical Networks business, which would radically depart from the low-margin old days at the industry level. Thus, it could be argued that Nokia is doing itself – and its competitors – a favor by further consolidating the industry and, more significantly, vertically integrating its Optical Networks group.

We would not rule out that Infinera receives other acquisition bids. We are excited to see how this deal plays out and congratulate the Nokia and Infinera teams. Please contact us to learn more about Nokia’s routing, Optical, new data center switching, and traditional telco markets. We have over ten reports that break out Nokia and Infinera.