Got the break/top news right after went back from the badminton field, what Should I say, Wow. Finally, eventually, Nokia is back, with this big move, looking forward to it’s next step to reveal the confuses in everyone’s mind.
HELSINKI, April 15 (Xinhua) — The speedy announcement early Wednesday of the merger of Nokia and Alcatel-Lucent was received with somewhat mixed feelings in Finland, the home country of Nokia.The companies have entered into a memorandum of understanding under which Nokia will make an offer for all of the equity securities issued by Alcatel-Lucent, through a public exchange offer in France and in the United States. The all-share transaction values Alcatel-Lucent at 15.6 billion euros (16.6 billion U.S. dollars).
The CEO of Nokia Rajeev Suri described the merger as “the right step at the right time.”
“After the merger with Alcatel-Lucent Nokia will be strong all over the world and in a leading position in China and the United States,” Suri told Finnish radio Yle on Wednesday.
Nokia shareholders will own 66.5 percent of the new company while existing Alcatel-Lucent owners will have 33.5 percent. The new company should be operational during 2016. Each share of Alcatel-Lucent will be matched with 0.55 Nokia share.
Finnish analyst Mikael Rautanen working for analysis firm Inderes told Finnish radio that in the transaction Alcatel-Lucent was “evaluated fairly highly”.
“Paying this much for it is justifiable only if the business of Alcatel-Lucent is made more profitable than what it is today and synergy benefits will work out,” Rautanen said.
He recalled that in the arrangement between Siemens and Nokia networks it took years to make operations profitable.
Finnish Minister for Economy Jan Vapaavuori welcomed the fact that the top management will remain in Finland. The minister said it was too early to assess whether jobs will be lost in Finland.
Fears were expressed amongst Nokia personnel on Wednesday about possible dismissals in Finland as French media reports claimed that Nokia had assured the French government that there would not be job loss in France.
Shop steward of upper level Nokia employees in the Helsinki area Tuula Aaltola was fairly open about the risks of changes in management culture.
She told Yle that combining Finnish and French management cultures will be difficult. She described the French style management as authoritarian.
“A Finnish executive meanwhile has confidence in the ability of the staff to manage itself on its own. The Finnish executive gives the aims and the motivation – and allows mistakes as well,” Aaltola said, adding that it is the strength of Nokia.
She said also that Nokia products were, in her opinion, better than those of Alcatel-Lucent and thus cutting back on development work in Finland would not make sense.
Alcatel-Lucent employs worldwide 52,600 persons. Nokia staff amounts to 61,500 and nearly 7,000 of them are in Finland.
The proposed transaction is subject to approval by Nokia’s shareholders, receipt of regulatory approvals and other customary conditions.
Immediately following the initial announcement about the possible merger on Tuesday, the value of Nokia shares at the Helsinki Stock
Exchange declined by nearly 4 percent whereas the Alcatel-Lucent shares rose by 16 percent in Paris.