Nokia plans to sell Alcatel Submarine Networks (ASN), a prominent submarine networks business, to the French State through the Agence des participations de l'Etat (APE).
Following the transaction, Nokia will maintain a 20% stake and board representation to facilitate a seamless transition in the beginning, with the rest of the shares to be acquired by the French State at a later stage.
The sale is anticipated to finalize by late 2024 or early 2025, pending approval from ASN’s French Works Council, along with customary closing conditions and regulatory clearances.
Focus on Network Infrastructure Portfolio
By the second quarter of 2024, Nokia expects to classify Alcatel Submarine Networks (ASN) as a discontinued operation. This divestiture of ASN, a non-core, standalone entity, will enable Nokia to concentrate on its Network Infrastructure portfolio, consisting of fixed, IP, and optical network segments, thereby enhancing profitability.
Notably, Nokia recently announced its acquisition of Infinera for USD 2.3 billion to improve Nokia’s optical scale in the region. Moreover, Megacable and Nokia have successfully implemented the first long-distance optical transmission channel in Mexico and Latin America to achieve a capacity of 1.1 Tbps.
“This is a good step forward in our strategy of actively managing our portfolio,” said Pekka Lundmark, President and CEO of Nokia. “ASN has gone through a significant transformation in recent years and has a strong market position. I am pleased we have found a natural owner for the business. The French State will ensure continued investment in ASN and protection of critical industry know-how.”
This divestment is projected to decrease Network Infrastructure's net sales by approximately EUR 1 billion while enhancing its operating profit margin by 100 to 150 basis points.
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Secure the Future of a Strong French and European Player
Commenting on this venture, Bruno Le Maire, French Minister of Economy, stated, “The Company [ASN] is one of the world leaders in the submarine cable market, and the only company of its kind in Europe.”
ASN is a leading player in both the French and global submarine communication networks markets. In 2016, Nokia acquired Alcatel-Lucent, including ASN and its reported 800,000 kilometers of undersea cables, for EUR 15.6 billion.
Over the eight years under Nokia’s ownership, ASN has significantly increased its revenues and is well poised to continue capitalizing on the substantial and expanding subsea cables market.
Alain Biston, President and CEO of ASN, added, “This is an incredibly exciting moment for ASN as we undertake the next phase of our development. The French State’s ownership gives us a stable platform to further develop our vertically integrated technology offering.”
The proposed sale of ASN to the French State follows extensive discussions, identifying the State as the best custodian for ASN. The French State values ASN's heritage, operations, and stakeholder relationships and has pledged to support ASN’s management, strategy, and sustainable development.
The Agence des participations de l'Etat (APE), which oversees a diverse portfolio of industrial and service sectors, will manage ASN, ensuring it remains a strong competitor in the global market.
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