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Nokia Oyj (NYSE:NOK) shares are trading higher after the company agreed to sell Alcatel Submarine Networks (ASN) to the French State, represented by the Agence des participations de l’Etat (APE) for an enterprise value of EUR350 million.
Post deal, Nokia will keep a 20% stake and board representation to ensure a smooth transition, with the French State set to acquire the remaining interest later. From the second quarter onward, Nokia will classify ASN as discontinued.
The sale is anticipated to be finalized by late 2024 or early 2025, pending formal consultation with ASN’s French Works Council, along with customary closing conditions and regulatory approvals.
The company’s Network Infrastructure Business Group will now include Fixed Networks, IP Networks, and Optical Networks.
This change is expected to reduce net sales by around EUR 1 billion but increase the operating profit margin by 100–150 basis points.
Meanwhile, this does not impact Nokia's previously stated financial outlook disclosed in its first-quarter 2024 financial report on April 18, 2024.
Pekka Lundmark, President and CEO of Nokia, said, “This is a good step forward in our strategy of actively managing our portfolio. ASN has been a standalone part of our Network Infrastructure business and through the divestment, Network Infrastructure will benefit from a streamlined portfolio with a focus on growth and strengthening its technology leadership. ASN has gone through a significant transformation in recent years and has a strong market position.”
Also Read: Nokia Demonstrates Future Of Voice Calls With 3D Audio: Details
Investors can gain exposure to the stock via IShares U.S. Digital Infrastructure And Real Estate ETF (NYSE:IDGT) and Defiance Quantum ETF (NYSE:QTUM).
Price Action: NOK shares are up 1.36% at $3.72 premarket at the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Wikimedia Commons
