Nokia buys Infinera for $2.3 billion to boost US optical division


Nokia is splashing the cash in hopes of capitalising on the burgeoning US fibre market.

It has agreed to buy optical networking specialist Infinera in a deal worth $2.3 billion. 70% of the sum will be paid in cash, the remaining 30% in Nokia shares. The kit maker said it will accelerate its share buyback programme to offset the dilution.

Nokia said the acquisition will grow the size of its Optical Networks division by 75 percent, enabling it to accelerate its product roadmap and increase its exposure to webscale customers, which account for around 30% of Infinera's revenue.

"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," said Nokia CEO Pekka Lundmark. "We believe now is the right time to take a compelling inorganic step to further expand Nokia's scale in optical networks."

Nokia's optical unit has had its ups and downs in recent years.

It enjoyed a strong performance in 2022, as supply chain constraints eased, enabling it to meet pent-up demand. That tailed off in 2023 though, and as such, full-year revenue growth at Optical Networks slowed to 3% last year compared to 11% in 2022. The slowdown is ongoing, and in the first quarter of 2024, revenue had slumped 35% year-on-year.

Read more

Share article