Nokia has inked an agreement to acquire Infinera Corp for $2.3 billion to expand its optical network business, particularly in North America.
The acquisition of the US optical networking gear maker would make Nokia the second largest optical networking vendor with a 20% market share, trailing Huawei.
The deal, priced at $6.65 per share, represents a 26.4% premium to Infinera's previous closing price. Nokia will pay at least 70% in cash, with Infinera shareholders able to receive up to 30% in Nokia's American Depositary Shares.
Expected to boost Nokia's earnings per share in the first year post-closure, the deal will add over 10% to profits by 2027.
The acquisition enables Nokia to expand its sales to tech giants like Amazon, Alphabet, and Microsoft, who are heavily investing in data centers.
CEO Pekka Lundmark highlighted the strategic timing and significant exposure to data centers as key benefits. Infinera's strength in intra data center communications, a rapidly growing market segment, adds value to Nokia's portfolio.
Nokia said it anticipates saving €200 million in costs post-acquisition closure next year.