Nokia has acquired Infinera for $2.3 billion, positioning itself as a key player in the optical networking market and potentially surpassing Ciena as the second-largest vendor.
Nokia’s strategic Infinera purchase positions Nokia to benefit from the significant investments in data centres driven by the AI surge. With this deal, Nokia’s market share in optical networking could reach 20%, just behind Huawei.
The acquisition enables Nokia to target sales to major tech firms such as Amazon, Alphabet, and Microsoft, which have heavily invested in data centres for AI advancements.
Nokia CEO Pekka Lundmark noted that the acquisition’s timing aligns perfectly with anticipated market growth. “AI’s impact on data centre investment makes this acquisition particularly strategic, boosting our data centre exposure,” Lundmark told Reuters.
Lundmark highlighted Infinera’s strength in intra-data centre communications, a rapidly growing tech sector.
Nokia’s stock rose 4% after the announcement, indicating shareholder approval. The company plans to finance the deal with 70% cash and 30% stock, expecting to save 200 million euros post-acquisition.
Despite Infinera’s uneven growth, Mads Rosendal, an analyst at Danske Bank Credit Research, believes the potential for significant synergies could justify the acquisition cost.
The deal combines Nokia’s extensive market reach in Europe and Asia with Infinera’s strong U.S. presence, creating a complementary business footprint. Lundmark noted, “With combined operational costs over three billion euros, achieving savings of 200 million euros is feasible,” and added that it is too early to discuss any potential job cuts.
