Nokia has announced the closing of the acquisition of Infinera Corporation. The San Jose based company has become part of Nokia effective as of the closing.
The acquisition brings together two innovation leaders with a history of industry firsts. In doing so, it creates an optical networks powerhouse with the scale to accelerate product roadmaps, further expanding Nokia’s ability to help network operators – whether service providers, webscalers or enterprises – unlock the opportunities and meet the network and power demands of the AI era.
“I am delighted we have been able to quickly and successfully complete the acquisition of Infinera. This transaction will significantly improve our scale and profitability in optical networks, and allows us to speed up the pace of innovation to meet the requirements of the AI era. The Infinera acquisition will accelerate our growth strategy in data centers and strengthen our presence both in North America and with webscale customers,” remarked Pekka Lundmark, President and CEO of Nokia.
“The speed with which the transaction was approved is very positive for Nokia, as is the strong support the deal has received from customers. In welcoming our new colleagues – and the talent and expertise they bring with them – we are creating a new organization that will be a pace-setter in innovation, offering capabilities across a wide range of optical networking technologies, underpinned by the cutting-edge research of Nokia Bell Labs. Innovation benefits from scale, and the expansion offered by the acquisition means that we will be able to bring more to customers, faster,” commented Federico Guillén, President of Network Infrastructure at Nokia.
The Infinera team will join Nokia’s Optical Networks business – headed by its Vice President and General Manager, James Watt. Meanwhile Infinera CEO, David Heard will join Nokia’s Network Infrastructure business group as NI Chief Strategic Growth Officer. In this position he will help to set and oversee the implementation of the business group’s growth plans, including specific customer segment strategies, product and market mix, and go-to-market approach across the business group.
“I am delighted to welcome David to Nokia and to Network Infrastructure. His extensive experience in technology and business strategy implementation will play a leading role in helping our business group seize opportunities in the market and achieve our ambitions across all our markets and business areas,” added Guillén.
“From strong growth in the webscale space to service provider successes spanning metro, long haul and subsea networks, the proven accomplishments of the Infinera team make for an ideal complement to Nokia’s recognized optical network leadership and innovation. I’m excited about the widely expanded opportunities this new chapter opens up and what it means for Nokia and its Network Infrastructure business, and delighted to be joining the team to help accelerate its growth across all customer segments worldwide,” said Heard.
With more than 1,000 customers globally, the combined company’s solutions power some of the biggest operators worldwide, along with leading organizations in verticals including enterprise, utilities, government and research & education.
Meeting the challenges of the AI era
Data centers are at an inflection point as AI and cloud put massive new demands on them. To overcome these challenges requires new ways of thinking about data center technology that emphasizes mission-critical aspects of networking technology.
Nokia’s offerings across the Network Infrastructure portfolio apply the same mission-critical standards to customers in every sector, from service providers to webscalers to organizations in a broad range of industry sectors. Directing innovation power towards topics such as reliability, security and sustainability – as well as capacity, flexibility and manageability – Nokia is strongly placed to bring value to data center builders and users, including in intra-data center for server-to-server connections to support the increasing demands of new AI workloads.
EUR 200 million synergy target reconfirmed
On 28 June 2024, Nokia and Infinera announced the companies had signed a definitive agreement under which Nokia would acquire Infinera for US$6.65 per share with shareholders able to elect cash, Nokia shares or a combination of both with a proration mechanism limiting the Nokia share issuance to approximately 30% of the aggregate consideration paid to Infinera shareholders. All Nokia shares will be issued to Infinera shareholders in the form of American Depositary Shares.
Nokia announced at the time and reconfirms today that it expects the transaction to be accretive to Nokia comparable operating profit and EPS in 2025 and Nokia continues to target over EUR 200 million of net comparable operating profit synergies from the deal by 2027 with the synergies ramping gradually over the three-year period. The transaction is expected to deliver over 10% comparable EPS accretion in 2027.
