Nokia CEO Pekka Lundmark believes that the timing for the acquisition of Infinera is right. He states that Nokia will buy Infinera just before the market experiences significant growth. In a move to accelerate its renewal, Nokia has acquired the US semiconductor company, Infinera, specializing in optical networks, for 2.3 billion dollars or 2.1 billion euros.
According to Lundmark, this acquisition is important for Nokia as it helps reduce dependence on telecom operator investments. Infinera, in addition to semiconductors, manufactures optical network equipment. The increase in demand for optical networks, especially driven by artificial intelligence and cloud services, has made Infinera a strong player in optical connections needed in data centers.
Nokia has been focusing on expanding its business customer base to reduce its reliance on telecom operators. Many operators have postponed investments due to increased financing costs, leading to a decline in demand for mobile network devices. By acquiring Infinera, Nokia aims to strengthen its position among technology giants operating data centers.
The deal with Infinera is expected to enhance Nokia’s technological leadership and market share in optical networks. By purchasing Infinera at this time, Nokia believes it is well-positioned to benefit from the anticipated growth in the market next year. The deal will be financed from Nokia’s cash resources, with a majority of the purchase price to be paid in cash.
Nokia estimates that the acquisition of Infinera will result in cost benefits and synergies, contributing to its overall growth and market position. The company aims to complete the transaction by next spring and plans to keep an eye out for future acquisition opportunities as part of its ongoing business strategy.