Nokia to Acquire Infinera for $2.3 billion to Scale Optical Network Capabilities

• Nokia announced it's going to acquired Infinera at $6.65 per share
• The move has been approved by the boards of both companies.
• The acquisition is expected to accelerate telcom product development and respond faster to the evolving needs of the market

On 27.06.2024, Finnish telecom giant Nokia announced that it's buying the California-headquartered optical networking vendor Infinera. The purchase was unanimously approved by the boards of both companies, and the deal is expected to close during H1 of 2026.

Infinera's shares are valued at $6.65 per share for the purposes of the transaction, bringing the enterprise value of the deal up to $2.3 billion. Nokia's Board of Directors has committed to fully offset the share capital dilution through additional buybacks of shares.

Source: Nokia Investor Relations

The two telecom vendors are at the forefront of the industry, with Infinera commandeering 8% of the optical network market. With 60% of Infinera's sales coming from the US ($1.6 billion in 2023), the acquisition is widely expected to make Nokia's position stronger in its North American market.

Moreover, the partnership between the two will boost Nokia's Optical Networks scale by 75%, allowing them to accelerate product development and respond faster to the evolving demands of telecom consumers. According to Nokia's investor presentation unveiled today (Friday June 28), the optical networking market is set to recover from 2025 onwards and grow at a CAGR of 5% to reach $16 billion by 2029, making the acquisition very timely.

Source: Nokia Investor RelationsNetwork Infrastructure Optimization

The acquisition, along with Nokia's recent sale of Alcatel Submarine Networks to the French government, is expected to support the creation of a reconfigured Network Infrastructure. The infrastructure in question will be based on three pillars - Fixed Networks, IP Networks, and Optical Networks.

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.Federico Guillen, President of Network Infrastructure at NokiaSource: NokiaInnovations

Moreover, the resulting collaboration between the R&D in-house teams of the two means that the optical network market will soon see brand-new innovations in digital signal processing, silicon photonics, indium phosphide-based semiconductors, and PIC, to name a few. These innovations are expected to significantly boost Nokia's market presence as an innovator with a diverse pool of talent.

Source: Nokia

Nokia investor report states that as a result of Nokia and Infinera combining their R&D forces, the combined optical business will make up 36% of total revenue, amounting to EUR 3.4 billion.

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.David Herman, CEO of Infinera

On Friday 26 June at 7 am BST, Nokia hosted a conference call to discuss the acquisition. You can watch it here.

Click to expand and view sources

1. Nokia to Acquire Infinera to Increase Scale in Optical Networks and Accelerate Product Roadmap (Infinera)
2. Inside Information: Nokia to acquire Infinera to increase scale in Optical Networks and accelerate product roadmap (Nokia)
3. Nokia enters into an agreement with the French State regarding the sale of leading submarine networks business ASN (Nokia)
4. Nokia buys optical vendor Infinera for $2.3 billion (Fierce Network)

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