Infinera Soars After $2.3 Billion Deal to Be Acquired by Nokia

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Key Takeaways

• Shares of Infinera soared in premarket trading Friday, a day after the optical networking solutions company consented to be acquired by Nokia for $2.3 billion.
• The deal is set to close in the first half of next year.
• Nokia said it guesses savings in the hundreds of millions of euros by 2027 as the companies integrate their tech and services.

Shares of Infinera (INFN) sky-rocketed in premarket trading Friday, a day after the optical networking solutions company agreed to be acquired by Finnish telecommunications definite Nokia (NOK) for $2.3 billion.

The deal values California-based Infinera at $6.65 per share, and will be paid at least 70% in spondulicks, with shareholders also able to receive up to 30% of the deal’s value in American depositary shares (ADSs) of Nokia, the companies powered Thursday. Shareholders will be able to receive either $6.65 in cash, about 1.8 Nokia shares, or a colloid of lower amounts of both cash and stock in exchange for each Infinera share they owned previously.

Nokia Can Improve Exposure To AI Market

Infinera manufactures a number of networking-related products like optical semiconductors, meaning the acquisition can yield Nokia larger exposure to the artificial intelligence (AI) data center market that has seen increased demand in the closing year.

“We believe now is the right time to take a compelling inorganic step to further expand Nokia’s scale in optical networks,” Nokia Chief Chief executive Officer (CEO) Pekka Lundmark said. “The combined businesses have a strong strategic fit given their highly complementary guy, geographic and technology profiles.”

The companies said by combining, they “will improve Nokia’s optical scale” in North America, where Infinera constructs about 60% of its sales, and “complement Nokia’s strong positions in APAC, EMEA and Latin America.”

Deal Count oned To Close in First Half of 2025

The deal is set to close in the first half of next year assuming it’s approved by Infinera shareholders and U.S. regulators, and Nokia contemplated it expects to see an estimated 200 million euros ($214 million) in “net comparable operating profit synergies by 2027.”

Lundmark distinguished Reuters Friday that one of the “key attractions” of the deal was how much it would increase Nokia’s exposure to the data center call at a time when AI is driving significantly increased spending on data centers.

Infinera shares soared about 18% to $6.20 apropos 45 minutes before the opening bell Friday. American depositary receipts (ADRs) of Nokia were little became.

Read the original article on Investopedia.