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European Commission approves Nokia, Al-Lu deal

Alcatel-Lucent is now several steps closer to being a part of Nokia after the European Commission approved the $16.5 billion acquisition. The transaction was cleared without conditions following a review.

Before being cleared by the commission, the deal had to clear antitrust reviews in Brazil and Serbia. The two companies also had to wait for a U.S. antitrust review to expire. Albania, Canada, Columbia and Russia also confirmed the deal.

The transaction still has a few obstacles to overcome, including approval by Nokia’s shareholders in order to become official, which is expected to happen in early 2016.

The structure of the brass of the new company will be mostly unchanged. Nokia CEO, Rajeev Suri, will continue as the top man of the new company and Risto Siilasmaa will remain chairman.

Suri said the most significant impact of 5G and the “Internet of Things” will be the way they transform vertical industries, adding that IoT will eliminate many inefficiencies that currently exist across vertical industries.

The new board of directors will have nine or 10 members with three to come from Alcatel-Lucent. Nokia’s headquarters will remain in Finland with strategic business and research and development locations in France, Germany, China and the U.S.

The current projection of cost savings is $956 million operating cost synergies through reduction in overlapping services, and the headcount in regional and central functions by the end of 2019. There is also expected to be a $212 million reduction in interest expenses through reduction in overhead costs such as real estate, manufacturing, supply chain, IT, and general and administrative expense costs by 2017.

Here’s some key facts about the two companies:

  • Year-end 2014 Alcatel-Lucent headcount – 52,600
  • Year-end 2014 Nokia headcount – 61,656
  • Year-end 2014 Alcatel-Lucent revenue spread: North America, 44%; Asia Pacific, 20%; Europe, 23%; the rest of the world, 13%
  • Year-end 2014 Nokia revenue spread: North America, 15%; Asia Pacific, 28%; Europe, 30%;  the rest of the world, 27%
  • Combined R&D employees in new company – 40,000
  • Combined R&D spend in new company – $5 billion
  • Combined services employees in new company – 42,000

ABOUT AUTHOR

Joey Jackson
Joey Jacksonhttp://www.RCRWireless.com
Contributorjjackson@rcrwireless.com Joey Jackson is an editor and production manager at RCRWireless.com and RCRtv based in Austin, Texas. Before coming to RCR, Joey was a multimedia journalist for multiple TV news affiliates around the country. He is in charge of custom video production as well as the production of the "Digs," "Gigs," "How it works" and "Tower Stories" segments for RCRtv. He also writes daily about the latest developments in telecom and ICT news. An Oregon native, Joey graduated from the University of Oregon with a degree in journalism and communications. He enjoys telling the stories of the people and companies that are shaping the landscape of the mobile world. Follow him on Twitter at @duck_jackson.