Nokia (NOK) Could Purchase Certain Alcatel (ALU) Assets and Resume Dividend Payments
Nokia (NYSE: NOK) is up today while Alcatel (NYSE: ALU) is lower on more market chatter that the next logical step between the two companies might be a merger of sorts.
Bloomberg noted earlier Monday that Nokia will have enough cash following the sale of its Devices & Services unit to Microsoft (Nasdaq: MSFT) to pay €2 billion for Alcatel's wireless network-equipment unit.
Following the €5.44 billion transaction, Nokia will have about €14 billion of cash in the coffers.
But, the deal wouldn't be entirely one-sided with Alcatel CEO Michel Combes looking to whittle down costs and sell unprofitable units as it looks to put the company back in the black.
Nokia purchasing the Alcatel assets would give it immediate exposure to the U.S. market, long dominated by Ericsson (Nasdaq: ERIC).
The low-cost purchase would still leave Nokia with enough left over to resume paying dividends, with some seeing an amount around 40 cents.
Nokia will need to act soon, as peers like Ericsson and Samsung might also decide to bid on the assets. Bloomberg cites company spokespeople in saying that Samsung isn't interested in buying the assets and Ericsson is still focused on organic growth.
Shares of Nokia are up 0.9 percent. Alcatel is down 1.4 percent.
Bloomberg noted earlier Monday that Nokia will have enough cash following the sale of its Devices & Services unit to Microsoft (Nasdaq: MSFT) to pay €2 billion for Alcatel's wireless network-equipment unit.
Following the €5.44 billion transaction, Nokia will have about €14 billion of cash in the coffers.
But, the deal wouldn't be entirely one-sided with Alcatel CEO Michel Combes looking to whittle down costs and sell unprofitable units as it looks to put the company back in the black.
Nokia purchasing the Alcatel assets would give it immediate exposure to the U.S. market, long dominated by Ericsson (Nasdaq: ERIC).
The low-cost purchase would still leave Nokia with enough left over to resume paying dividends, with some seeing an amount around 40 cents.
Nokia will need to act soon, as peers like Ericsson and Samsung might also decide to bid on the assets. Bloomberg cites company spokespeople in saying that Samsung isn't interested in buying the assets and Ericsson is still focused on organic growth.
Shares of Nokia are up 0.9 percent. Alcatel is down 1.4 percent.