Nokia's $22bn Alcatel-Lucent buy, EU accuses Google of antitrust violations, Telstra to end Pacnet brand

Nokia has entered into an agreement to buy Alcatel-Lucent in an all-share transaction valued at €15.6 billion (about AU$22 billion at time of announcement).

The terms of the acquisition have been approved by both companies’ boards of directors, but the sale is still subject to approval by Nokia’s shareholders.

The sale, if it goes ahead as set out in the agreement, will take the form of a public exchange offer in France and in the United States, on the basis of 0.55 of a new Nokia share for every Alcatel-Lucent share.

Nokia shareholders would own 66.5% of the fully diluted share capital of the merged company, while Alcatel-Lucent shareholders would own 33.5%.

The combined company would be called Nokia Corporation and be headquartered in Finland. The merged company’s board would have nine or 10 members, three of whom would be from Alcatel-Lucent.

Rajeev Suri, currently the president and CEO of Nokia, would serve as the merged company’s CEO.

“Our innovation capability will be extraordinary, bringing together the R&D engine of Nokia with that of Alcatel-Lucent and its iconic Bell Labs. We will continue to combine this strength with the highly efficient, lean operations needed to compete on a global scale,” Suri said.

According to Nokia, the sale is expected to close in the first half of 2016.

EU accuses Google of antitrust violations

The European Commission (EC) has officially accused Google of infringing European Union (EU) antitrust rules, alleging that Google favours its own shopping service in general internet search results. Separately, the EC has also opened an antitrust investigation into Google’s Android operating system.

The EC last week revealed it had sent a Statement of Objections to Google, alleging that Google has abused its dominant position in general internet search in the European Economic Area (EEA) by systematically favouring its own comparison shopping services in general search results pages.

EU Commissioner Margrethe Vestager said: “In the case of Google I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules.”

The fact that the EC has submitted a Statement of Objections does not mean that the EC has made a final decision in its investigation, however. Vestager explained: “Google now has the opportunity to convince the commission to the contrary. However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe.”

The EC has also launched an antitrust investigation into Google’s Android. According to an EC statement, “The Commission will assess if, by entering into anticompetitive agreements and/or by abusing a possible dominant position, Google has illegally hindered the development and market access of rival mobile operating systems, mobile communication applications and services in the European Economic Area (EEA).”

A more complete breakdown of the EC’s Statement of Objections is available here and more detail on its Android investigation is available here.

A full statement from Vestager on both matters is available here and is well worth a read.

Telstra discontinues Pacnet brand

Telstra has completed its US$697 million acquisition of Pacnet and will discontinue the Pacnet brand, the Australian telco revealed last week.

Pacnet is a provider of connectivity, managed services and data centre services to carriers, multinationals and governments in the Asia-Pacific region.

Telstra’s acquisition of Pacnet was announced on 23 December last year. The US$697 million purchase value equalled approximately AU$858 million at the date of announcement.

Telstra Group Executive Global Enterprise and Services Brendon Riley said last week that Pacnet will be integrated into Telstra and the Pacnet brand progressively retired.

“The addition of Pacnet’s staff, infrastructure, technology and expertise will position Telstra as a leading provider of services to multinational and large companies in Asia,” Riley said.

Telstra said that Pacnet’s US assets will be integrated into Telstra when regulatory approval is obtained.

“Completion of the acquisition of the US assets is expected in due course and does not impact operations or the agreed purchase price,” a statement from Telstra read.

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