Nokia is set to acquire US optical networking gear maker Infinera in a deal worth $2.3 billion. The Finish company is allocating more resources to networking products for data centers to capitalize on the rise of artificial intelligence (AI). 

Nokia Acquires Infinera for $2.3 Billion

The deal, which values Infinera at $6.65 per share, represents a 28% premium to its closing price on June 26 and a 37% premium to the six-month volume-weighted average price.

The acquisition will be financed primarily in cash, with Infinera shareholders given the option to receive up to 30% of the payment in American depositary shares (ADSs) of Nokia.

Nokia's Board has committed to accelerating its share buyback program to counterbalance the share dilution from the deal.

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Enhancing Scale and Profitability

Nokia and Infinera believe that merging their operations will enhance scale and profitability, facilitating faster development of new products and solutions. The acquisition is anticipated to support Nokia's goal of achieving a double-digit operating margin in its Optical Networks business. 

It is expected to positively impact Nokia's earnings per share within the first year and contribute to over 10% EPS growth by 2027, with returns on invested capital exceeding the company's weighted average cost of capital. 

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