Worries Over Nokia-Alcatel Merger Warranted?

Nokia-Alcatel Merger Warranted

Nokia-Alcatel Merger WarrantedMany investors wonder whether Nokia and Alcatel-Lucent’s merger has been successful. Since Nokia announced the Alcatel-Lucent merger last April, it lost a quarter of its market capitalization.

Nokia’s takeover bid has passed regulators and as of January 14, Nokia and Alcatel-Lucent have operated as a single group. Its total value is about 25 billion euros. The next step, according to Nokia CEO Rajeev Suri, is for the two companies to move to achieve full integration. The Finnish giant plans to roll out a seven-billion-euro program to optimize its capital structure and return excess capital to shareholders.

The new Nokia-Alcatel shares, no longer traded in the United States, will be the giant of European telecommunications. The company has projected annual revenue of 26 billion euros (about US$27.0 billion).Nokia-Alcatel Merger Warranted

Investors may not have seen the gains they were expecting, however it may be a case of excessive greediness.

The new Nokia, first stripped of cell phones, has produced results and investors have more reason to be bullish than bearish. The February 1 sell-off offers an opportunity to get into NOK stock at a nicely discounted price. There are integration concerns, whereas the risk, in view of the French government’s agreement and support, has already dropped compared to last year.

Nokia-Alcatel Merger Warranted

For those willing to take a calculated risk, Nokia stock could be worth a closer look.

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