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Helsinki-based Nokia Corp. (NOK) entered a merger agreement on June 28, 2024, to acquire U.S. optical networking gear maker Infinera Corp. (INFN) for $2.3 billion, as the Finnish firm looks to expand its optical network business, especially in the North American market.

Mechanics of the Deal:

Under the terms of the agreement, Nokia will acquire Infinera for $6.65 per share, representing a 26.43% premium on Infinera’s last close.

Nokia will pay at least 70% of the consideration in cash. Infinera shareholders can choose to receive up to 30% of the total payment in Nokia ADSs.

Infinera shareholders can choose either $6.65 in cash, 1.7896 Nokia shares, or a combination of $4.66 in cash and 0.5355 Nokia shares for each Infinera share.

Should Infinera choose to terminate the merger agreement, it will be liable to pay Nokia a termination fee of $65 million. Likewise, if Nokia terminates the agreement, it will have to pay $130 million.

Unlock premium insights on the NOK-INFN m&a deal now @ https://www.insidearbitrage.com/deal-metrics/INFN/2998/infinera-corp-to-be-acquired-by-nokia-corp/

Company Profile:

San Jose, California-based Infinera (INFN) is a global supplier of optical networking solutions and semiconductors, enabling carriers, cloud operators, governments, and enterprises to scale bandwidth, accelerate service innovation, and automate operations in long-haul, submarine, data center interconnect, and metro transport applications.

Nokia is a Finland-based global provider of mobile, fixed, and cloud network solutions, operating through Network Infrastructure, Mobile Networks, Cloud and Network Services, and Nokia Technologies segments.

Deal Details and Timeline:

The deal is expected to add to Nokia’s comparable earnings per share in the first year after close and over 10% to profits by 2027. The deal is expected to close during the first half of 2025.

Infinera’s current Price/Sales (TTM) ratio is 0.79, below the sector median of 2.97.

Nokia aims to achieve 200 million euros in net comparable operating profit synergies by 2027 through this acquisition.

Strategic Benefits for Nokia and Infinera

The acquisition is expected to deliver several strategic benefits for both companies:

1. Improving global scale and product roadmap: The combination will increase the scale of Nokia's Optical Networks business by 75%, enabling it to accelerate its product roadmap timeline and breadth.
2. Gaining scale in the North American optical market: Infinera has built a strong presence in North America, representing approximately 60% of its sales. This will improve Nokia's optical scale in the region and complement its existing positions in other regions.
3. Accelerating expansion into enterprise and webscale markets: Infinera has a significant presence in the fast-growing webscale customer segment, which makes up over 30% of its sales. The acquisition offers an opportunity for Nokia to significantly increase its penetration into this market

Deal Metrics:

For more details regarding this M&A transaction, please visit the Deal Metrics page here: @ https://www.insidearbitrage.com/deal-metrics/INFN/2998/infinera-corp-to-be-acquired-by-nokia-corp/

The Deal Metrics page for each merger or acquisition includes:

– A spread history chart of the merger from announcement through eventual completion or failure. – Every event as the merger progresses through the expiration of the HSR period, various regulatory approvals, shareholder votes, etc. – News and SEC filings. – A history of deal updates. – And a whole lot more.

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Disclaimer: This press release includes forward-looking statements within the meaning of applicable securities laws. Forward-looking statements can generally be identified by the use of words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," or similar expressions. These statements are based on the current expectations and beliefs of Nokia Corp. (NOK) and Infinera Corp. (INFN) management and are subject to a number of risks, uncertainties, and assumptions that could cause actual results to differ materially from those described in the forward-looking statements.

This content does not constitute financial advice, investment advice, or any other kind of advice, and should not be relied upon as such. Readers are encouraged to conduct their own research and seek professional guidance before making any investment decisions. The completion of the transaction is subject to various conditions, including shareholder and regulatory approvals, and there can be no assurances that the transaction will be completed as described. Neither the author nor the publishing platform assumes any responsibility or liability for any errors or omissions in the content of this press release.

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