Nokia Buying Infinera In $2.3 Billion Deal

By Amit Chowdhry • Jun 27, 2024

Nokia and Infinera, a global supplier of innovative open optical networking solutions and advanced optical semiconductors, today announced a definitive agreement under which Nokia will buy Infinera in a deal valuing the company at $6.65 per share or an enterprise value of $2.3 billion.

This deal represents a premium of 28% to Infinera’s share price at the close of June 26, 2024, and a 37% premium to the trailing 180-day volume weighted average price (VWAP). And at least 70% of the consideration will be paid in cash and Infinera’s shareholders can elect to receive up to 30% of the aggregate consideration in the form of Nokia ADSs. Nokia’s Board has committed to increase and accelerate Nokia’s share buyback program to offset the dilution from the deal.

Nokia and Infinera see a major opportunity in merging to improve scale and profitability, enabling the combined business to accelerate the development of new products and solutions to benefit customers. And the deal aligns strongly with Nokia’s strategy as it is expected to strengthen the company’s technology leadership in optical and increase exposure to webscale customers.

Nokia believes this deal has compelling financial and strategic merit. And the combination with Infinera is projected to accelerate Nokia’s plan to set up a double-digit operating margin in its Optical Networks business. Nokia aims to achieve EUR 200 million of net comparable operating profit synergies by 2027.

This deal – along with the recently announced sale of Submarine Networks – will create a reshaped Network Infrastructure built on three pillars of Fixed Networks, IP Networks, and Optical Networks. And Nokia targets mid-single digit organic growth for the overall Network Infrastructure business and to improve its operating margin to mid-to-high teens level.

This deal is expected to be accretive to Nokia’s comparable EPS in the first year post close and deliver over 10% comparable EPS accretion by 2027, with a return on invested capital (RoIC) comfortably above Nokia’s weighted average cost of capital (WACC).

This combination will increase the scale of Nokia’s Optical Networks business by 75%, enabling it to accelerate its product roadmap timeline. This deal also provides better products for customers and creates a business that can sustainably challenge the competition.

The combined business will have significant in-house capabilities, including expanded digital signal processor (DSP) development team, expertise across silicon photonics and indium phosphide-based semiconductor material sciences, and deeper competency in photonic integrated circuit (PIC) technology.

The two companies also have limited customer overlap, putting the combined business in a strong position in all regions (excluding China). Infinera has built a major presence in the North American optical market, representing about 60% of its sales, which will improve Nokia’s optical scale in the region and complement Nokia’s strong positions in APAC, EMEA, and Latin America.

The combination of these two businesses is also expected to accelerate Nokia’s strategic goal of diversifying its customer base and growing in enterprise. And Internet content providers (ICP or webscale as Nokia typically calls this segment) make up over 30% of Infinera’s sales.

Infinera has also recently been developing high-speed and low-power optical components for use in intra-data center (ICE-D) applications and which are particularly suited to AI workloads which can become a very attractive long-term growth opportunity. This acquisition offers an opportunity for a step change in Nokia’s penetration into webscale customers.

The combination is expected to deliver EUR 200 million of net comparable operating profit synergies by 2027. About one-third of the synergies are expected to come from the cost of sales due to supply chain efficiencies and the remainder from operating expenses due to portfolio optimization and integration along with reduced product engineering costs and standalone entity costs. And Nokia expects one-time integration costs of approximately EUR 200 million related to the transaction.

In connection with this deal, Nokia’s Board of Directors has committed to increasing and accelerating Nokia’s on-going share buyback program to mitigate dilution from the equity component of the acquisition. And this will be in addition to Nokia’s on-going EUR 600 million buyback program.

At or around the time of closing of the deal, Nokia will repurchase Infinera’s outstanding convertible notes for an estimated total value of approximately $760 million, including estimated change of control costs which is already considered in the previously mentioned $2.3 billion enterprise value.

The deal has been unanimously approved by the board of directors of Nokia and Infinera. And it is targeted to close during the first half of 2025, subject to approval by Infinera’s shareholders, regulatory approvals including antitrust, CFIUS, and other foreign direct investment approvals and other customary closing conditions.

Oaktree Optical Holdings, which owned approximately 11% of Infinera common stock as of June 27, 2024, has agreed to vote their shares in favor of the transaction.

PJT Partners served as financial advisor to Nokia. Skadden, Arps, Slate, Meagher & Flom and Roschier, Attorneys served as legal advisors.

And Centerview Partners is acting as exclusive financial advisor to Infinera. Wilson Sonsini Goodrich & Rosati served as legal advisor.


“In 2021 we increased our organic investment in Optical Networks with a view to improving our competitiveness. That decision has paid off and has delivered improved customer recognition, strong sales growth and increased profitability. We believe now is the right time to take a compelling inorganic step to further expand Nokia’s scale in optical networks. The combined businesses have a strong strategic fit given their highly complementary customer, geographic and technology profiles. With the opportunity to deliver over 10% comparable EPS accretion, we believe this will create significant value for shareholders.”

  • Pekka Lundmark, President and CEO of Nokia

“Today, Network Infrastructure offers a unique portfolio across the fixed access, optical and IP networks domains built on leading technology innovation and a strong customer focus. This acquisition will further strengthen the optical pillar of our business, expand our growth opportunities across all our target customer segments and improve our operating margin. I am extremely pleased that we are bringing together these two talented and dedicated teams. Separately, we have long respected each other as competitors. Together, we find the logic of combination irresistible.”

  • Federico Guillén, President of Network Infrastructure at Nokia

“We are really excited about the value this combination will bring to our global customers. We believe Nokia is an excellent partner and together we will have greater scale and deeper resources to set the pace of innovation and address rapidly changing customer needs at a time when optics are more important than ever – across telecom networks, inter-data center applications, and now inside the data center. This combination will further leverage our vertically integrated optical semiconductor technologies. Furthermore, our stakeholders will have the opportunity to participate in the upside of a global leader in optical networking solutions.”

  • David Heard, CEO of Infinera