Nokia recently assessed a bid for Alcatel-Lucent’s IP routing and wireless units but decided not to go ahead, according to The Wall Street Journal.
However, the idea of a tie-up with Alcatel-Lucent is likely to reappear on the agenda at some point in the future, said the report.
Such talk has become more likely as Nokia’s network division NSN moves to the heart of the new Nokia, following the proposed sale of the group’s handset business to Microsoft.
The company’s shareholders yesterday endorsed the sale with overwhelming support. More than 99 per cent of the votes cast at a specially convened EGM supported the Microsoft deal.
Speculation about a Nokia approach to Alcatel-Lucent is not new. Previous reports have also had the Finnish vendor eyeing a deal.
And new Nokia will certainly have the firepower for such a deal, with net cash of €7 billion to €8 billion on its balance sheet, following the Microsoft deal.
However, there are plenty of obstacles, including Nokia’s reluctance to acquire the whole of Alcatel-Lucent. There are parts of the latter’s business, such as optical networking, that would not interest NSN.
Interestingly, Alcatel-Lucent has become a more expensive target too since its recovery plans have started to bite earlier this year. Earnings are stronger than previously thought and the share price has risen strongly.