Nokia and Infinera, a global supplier of open optical networking solutions and advanced optical semiconductors, signed an agreement for Nokia to purchase Infinera for $2.3 billion.
The merger is expected to improve scale and profitability, allowing the combined business to accelerate the development of new products and solutions. It also aligns with Nokia’s strategy, as it is expected to strengthen Nokia’s optical technology leadership and increase exposure to webscale customers.
This transaction – along with the recently announced sale of Submarine Networks – will create a reshaped network infrastructure built on three pillars:
- Fixed networks
- IP networks
- Optical networks
“In 2021 we increased our organic investment in optical networks with a view to improving our competitiveness,” said Nokia president and CEO, Pekka Lundmark. “That decision has paid off and has delivered improved customer recognition, strong sales growth and increased profitability. We believe now is the right time to take a compelling inorganic step to further expand Nokia’s scale in optical networks. The combined businesses have a strong strategic fit given their highly complementary customer, geographic and technology profiles. With the opportunity to deliver over 10 percent comparable EPS accretion, we believe this will create significant value for shareholders.”
“Today, Network Infrastructure offers a unique portfolio across the fixed access, optical and IP networks domains built on leading technology innovation and a strong customer focus,” said Federico Guillen, president of network infrastructure with Nokia. “This acquisition will further strengthen the optical pillar of our business, expand our growth opportunities across all our target customer segments and improve our operating margin. I am extremely pleased that we are bringing together these two talented and dedicated teams. Separately, we have long respected each other as competitors. Together, we find the logic of combination irresistible.”
“We are really excited about the value this combination will bring to our global customers,” said Infinera CEO, David Heard. “We believe Nokia is an excellent partner and together we will have greater scale and deeper resources to set the pace of innovation and address rapidly changing customer needs at a time when optics are more important than ever – across telecom networks, inter-data center applications, and now inside the data center. This combination will further leverage our vertically integrated optical semiconductor technologies. Furthermore, our stakeholders will have the opportunity to participate in the upside of a global leader in optical networking solutions.”
Strategic benefits include:
- Improving global scale and product roadmap
- In-house capabilities, including an expanded DSP development team, expertise across silicon photonics and indium phosphide-based semiconductor material sciences and deeper competency in photonic PIC technology
- Bolstered scale in North American optical market
- Accelerating Nokia’s expansion into enterprise and webscale
The acquisition has been unanimously approved by the board of directors of both Nokia and Infinera, with a targeted close during 1H 2025. It remains subject to approval by Infinera shareholders, regulatory approval and other closing conditions.
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