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Telecoms equipment rumour mill turns its attention to Nokia

Rajeev Suri 1.jpg

Telecoms equipment company Nokia is facing rumours of an impending takeover bid, though no one at the Finnish company is commenting.

One report said Nokia has hired Citi, the US investment bank, to defend itself, though Nokia said it “does not comment on market rumours”.

Nokia, long ago shorn of its mobile-handset business, is now one of the world’s two leading non-Chinese equipment suppliers in the mobile business, the other being Ericsson, from neighbouring Sweden.

NEC and Samsung, from Japan and South Korea respectively, have smaller shares in a market increasingly dominated by Huawei and ZTE, both of China.

Nokia’s market cap this morning was €18.38 billion, with a share price of €3.35, about half the €7.15 its shares were trading at five years ago. Some analysts are pointing towards a price of €4.38, though no analysts would comment.

When reports emerged in February that Nokia was looking at possible asset sales – reports that Nokia denied – the company announced that Rajeev Suri (pictured), its CEO since 2014, would leave in September, to be replaced by Pekka Lundmark, who heads a Finnish energy company.

The current share price hardly reflects Nokia’s acquisitiveness over the past seven years, when it took over the 50% of Nokia Siemens Networks – a joint venture with the German group – it did not own, for an estimated €1.2 billion.

Its biggest deal was five years ago this month, when it bought Alcatel-Lucent for €16.6 billion. That French-US company was created in 2006 when Alcatel of France bought Lucent of the US – formerly a spin-off of AT&T – for $13.4 billion.

Unconfirmed reports yesterday said Nokia “was working to defend itself from a hostile takeover bid for parts or all of its business”. 

Suri had previously headed the group’s equipment division, Nokia Solutions and Networks (NSN – formerly Nokia Siemens Networks).

 

 

 

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