Nokia announced that it has initiated a put option to sell Alcatel Submarine Networks (ASN), a prominent submarine networks business, to the French State through the Agence des participations de l'Etat (APE).
The sale is contingent upon informing and consulting with ASN and Nokia's relevant employee representatives. Nokia will retain a 20% stake in ASN with board representation to ensure a smooth transition until its planned exit, after which the French State intends to acquire Nokia's remaining interest.
The divestment of ASN, identified as a non-core standalone business by Nokia, allows the company to concentrate on growth opportunities within its core markets in Network Infrastructure and enhance profitability within its Network Infrastructure Business Group. This transaction underscores Nokia's proactive approach to managing its business portfolio; a key pillar of the company's strategic initiatives.
Starting from the second quarter, Nokia expects to account for ASN as a discontinued operation. Moving forward, Nokia's Network Infrastructure Business Group will comprise three units: Fixed Networks, IP Networks, and Optical Networks. This strategic realignment is anticipated to reduce the Network Infrastructure unit’s net sales by approximately EUR 1 billion while improving its operating profit margin by 100–150 basis points. Nokia confirms that this adjustment will not affect the financial outlook previously disclosed in its Q1 2024 financial report on April 18, 2024.
Wholesale and Capacity News: T-Mobile, Nokia Partner to Optimize Scalability and Efficiency of 5G HSI Service
Under Nokia's ownership, ASN has experienced substantial revenue growth and is well-positioned to capitalize on the expanding subsea cables market, which has seen increased demand and significance.
The proposed sale of ASN to the French State follows extensive discussions determining the French State as the most suitable custodian for ASN. With its stability and long-term commitment to critical infrastructure, the French State ensures continuity for ASN's customers, employees, and partners.
Acknowledging ASN's heritage, operations, and relationships with key stakeholders, the French State has expressed full support for ASN's management and strategic direction. Additionally, it has committed to investing in ASN's business and promoting the sustainable development of its vertically integrated technology offerings.
Also Read: SPLANG and EllaLink Reveal Plans for a Subsea Route Between Europe and French Guiana
Pekka Lundmark, Nokia's President and CEO, expressed that the divestment of ASN marks a positive move in their portfolio management strategy. ASN, previously a standalone part of Nokia's Network Infrastructure Business, will enable the unit to streamline its portfolio, concentrate on growth, and enhance its technology leadership. Lundmark noted ASN's substantial transformation and strong market position, emphasizing satisfaction in identifying the French State as the business's suitable custodian. He highlighted the French State's commitment to ongoing investment in ASN and preservation of crucial industry expertise.
Alain Biston, President and CEO of ASN, said, “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. This, combined with Nokia’s retained stake, underscores all parties’ aligned interests in delivering a smooth transition for the benefit of our customers, suppliers and other stakeholders.”
Bruno Le Maire, French Minister of Economy, expressed the French State's enthusiasm in announcing its intention to acquire an 80% stake in ASN through the Agence des Participations de l’Etat (APE). Highlighting ASN's global leadership in the submarine cable market and its unique status as Europe's sole representative in this field, Le Maire underscored the strategic significance of this acquisition.
APE manages a diverse portfolio spanning various industrial sectors, services, and global enterprises. With APE's acquisition of ASN, the French State aims to safeguard the future of a robust French and European entity in a fiercely competitive global market.
The transaction is anticipated to be finalized by late 2024 or early 2025, pending formal consultation with ASN's French Works Council, customary closing procedures, and regulatory clearances.
Related: PCCW Global, Zain Collaborate in Connecting Middle East with Europe
