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Nokia to buy Alcatel-Lucent in 15.6-billion-euro deal

Nokia and Alcatel-Lucent say the merger will not lead to any job cuts in France
Nokia and Alcatel-Lucent say the merger will not lead to any job cuts in France Reuters/Gonzalo Fuentes

Finnish telecom giant Nokia is to buy Franco-American rival Alcatel-Lucent in an all-stock, 15.6-billion-euro deal, the companies said Wednesday.

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The new group will go by the name Nokia and will be run by Nokia’s current management team.

But the companies have stressed that the deal will not lead to any job cuts in France on top of the restructuring already taking place in Alcatel-Lucent.

Ahead of the announcement, the French government said Tuesday that it was concerned about what the acquisition would mean for jobs in France. French President Francois Hollande met with executives of both companies at the Elysee palace for commitments on employment, while Economy Minister Emmanuel Macron told French news agency AFP that he would be “extremely vigilant about preserving jobs and all French factories”.

Meanwhile, Alcatel-Lucent head Michel Combes told French news channel BFM Business on Wednesday that the company would hire 500 additional people in France for research and development.

The new group plans to save 900 million euros in operating expenses by the end of 2019. It also aims to slash another 200 million euros in interest expenses.

The companies say they expect to close the deal in the first half of 2016. Nokia has agreed to give Alcatel-Lucent shareholders 0.55 shares of stock in the new company for every one of its own once the transaction is complete.

The agreement caps months of negotiations backed by the French government, which has in the past blocked takeovers of companies it considers national treasures. The government blocked bids by US internet giant Yahoo! and Hong Kong telecoms company PCCW to acquire video-sharing site Dailymotion.

The deal “comes at the right time to strengthen the European technology industry," Combes told AFP. "The global scale and footprint of the new company will reinforce its presence in the United States and China.”

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