CEO Rajeev Suri set to leave Nokia later this year
According to multiple published reports, primarily sourced from an initial piece in TMT Finance, claim Finnish network infrastructure vendor Nokia has engaged Citi to “to defend itself from a hostile takeover bid for parts or all of its business.” Nokia has declined to comment on what it referred to as “market rumours.”
Nokia hasn’t seen the same 5G bounce competitors Ericsson and Huawei have, and the vendor reduced its 2020 revenue outlook. Nokia is also in the process of cutting costs by more than $550 million before year-end.
CEO Rajeev Suri earlier this year he “wanted to do something different” after 25 years wtih Nokia…I leave the company with a belief that a return to better performance is on the horizon and with pride for what we have accomplished over time.”
Suri is set to be replaced by Pekka Lundmark who is currently the CEO Finnish energy company Fortum. Bringing in a chief executive from the industrial sector is consistent with Nokia’s Industry 4.0 drive 5G sales not only with operators but also among vertical industries looking to leverage private networks for digital transformation. Lundmark takes the helm September 1.
Reports vaguely pin a potential price for the company in the $17 billion range, which would seem to be at least $1 billion less than Nokia’s market cap. Nokia’s stock price went up on reports of a potential hostile takeover.
The big question here is who would buy Nokia? Another thing to keep in mind, U.S./China relations, with Huawei as a proxy, have led to an increased focus among lawmakers on the telecom sector with U.S. Attorney General Bill Barr calling open RAN “pie in the sky” and calling for U.S. investment in Ericsson or Nokia.
