Helsinki (AFP) – Shareholders in Finnish telecom group Nokia are widely expected to approve the company’s acquisition of French-American rival Alcatel-Lucent at an extraordinary general meeting in Helsinki on Wednesday.
Once the world’s top mobile phone maker, Nokia hopes the merger will help it become the world’s number one network equipment and service provider, with a combined revenue of nearly 25 billion euros ($26.5 billion).
Nokia called its shareholders to authorise the deal after it had obtained all necessary regulatory approvals for the deal last month, mainly from the United States, France and China.
The meeting was to begin at 1400 GMT.
Equity strategist Kristian Tammela at Nordea Wealth Management saw little risk of the transaction being rejected by Nokia’s shareholders.
“I don’t think anyone expects anything other than for the decision to be passed swiftly in good order. I expect it to be … a piece of cake,” Tammela told AFP.
After the approval, the last remaining step for the Finnish group is to conclude its public exchange offer, under which it has asked Alcatel-Lucent’s shareholders to swap their stakes, offering 0.55 Nokia shares for each Alcatel-Lucent share.
The acquisition will allow Nokia to expand from telecoms networks to Internet networks and ‘cloud’ services to better compete with its global rivals, the Swedish group Ericsson and Huawei of China.
“The combined company would lead in key geographies like North America and China… Our innovation capabilities will be massive, with an annual spending of 4.7 billion euros ($5 billion),” Nokia chief executive Rajeev Suri said in mid-November.
Analysts view the deal positively.
“In our opinion it makes sense. Of course every transaction has its difficulties and it won’t be easy but clearly it will bring the benefits of size,” Nordea’s Tammela said.
Nokia hopes to close the deal in the first quarter of 2016.
This year Nokia has recovered from the financial woes it suffered after failing to adapt to the rapid rise of smartphones, which ended with it selling its unprofitable handset division to Microsoft two years ago.
The reformation is not Nokia’s first. In its 150 years of existence, the company has redefined itself numerous times before, from a pulp, rubber and cable manufacturer to a television, computer and mobile phone maker.
from Business Insider http://ift.tt/1NntqNC