By Denny Jacob

Nokia agreed to acquire Infinera in a deal valued at $2.3 billion as it pins more resources to its optical networks business.

The Finnish maker of 5G cellular antennas and other telecom infrastructure said the combination with networking solutions provider Infinera is expected to accelerate its path to double-digit operating margins in its optical networks business. The transaction plus the recent sale of submarine networks will reshape its Network Infrastructure business to be built around fixed networks, IP networks and optical networks, said Nokia.

The deal, which is valued at $6.65 a share, is a 28% premium from Infinera's stock price at the close on Wednesday. At least 70% of the consideration will be paid in cash and Infinera shareholders can elect to receive up to 30% of the remaining portion in the form of Nokia's American depositary shares.

The $2.3 billion enterprise value of the deal includes the repurchase of Infinera's $760 million in convertible notes.

Nokia expects the deal to be accretive to its comparable earnings per-share in the first year post close and to deliver over 10% comparable EPS accretion by 2027.

Nokia said its board has committed to increase and accelerate its share buyback program to offset the dilution from the deal.

The acquisition was approved by boards of both companies and is targeting a close in the first half of 2025.

Write to Denny Jacob at denny.jacob@wsj.com


(END) Dow Jones Newswires

06-27-24 1800ET