Finnish networking tech company Nokia plans to acquire the US optical networking firm Infinera, in a cash-and-stock deal valued at around 2.1 billion euros (2.3bn USD), according to a press release issued on Friday.
Headquartered in San Jose, California, Infinera manufactures optical telecommunications equipment and technology. According to Nokia, the acquisition will strengthen its position in the optical network market, particularly in North America.
Nokia said the deal would lead the company to increase the scale of its optical networks business by 75 percent.
"Nokia and Infinera see a significant opportunity in merging to improve scale and profitability, enabling the combined business to accelerate the development of new products and solutions to benefit customers," the press release said.
The cash and stock acquisition sets Infinera's value at 6.65 US dollars per share, reflecting a 37 percent premium on the company's trailing 180-day average price, Nokia said.
At least 70 percent of the transaction will be paid in cash, and a maximum of 30 percent in shares, according to the Finnish firm.
Nokia said it anticipated that the acquisition would contribute to net profits of 200 million euros, and improve comparable per-share earnings of 10 percent by 2027.
The acquisition, which the boards of both companies have greenlit, is expected to be completed during the first half of next year.
On Thursday, the Espoo based company announced it was in the process of selling its subsea cable networking business, ASN, to the French state, in a deal worth around 350 million euros.
According to news agency Bloomberg, the Infinera deal will be Nokia's biggest acquisition since 2016, when it purchased its rival Alcatel-Lucent for nearly 17 billion US dollars. The Alcatel-Lucent acquisition was the largest business transaction in Finnish history.
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