It has been reported that Nokia might be taking steps to defend itself from a hostile takeover, due to finding difficulty in maintaining profitability as the market transitions to 5G.
Reports suggest Nokia has enlisted the services of Citi in order to guard against the acquisition of part or all of the company. Shares rose by 12.5% as the investors were made are of the deal with a value of $17.4 billion.
Nokia has declined to make a statement about the speculated acquisition, which started to become more public in February.
Bloomberg were the first to release news about this, however the report err on the side of merger or a sale of assets, it is worthwhile stating the report suggested these options were only being explored by Nokia and no action had been taken.
The Finnish network giant will have to compete with companies like; Huawei, Ericsson, Cisco and Samsung if they want to maintain a position in the 5G market.
Nokia has previously stated that “procuring equipment, software and services from a single vendor can reduce total cost of ownership by more than 20 per cent and reduce time to market by at least 30 per cent when compared to a multi-vendor strategy.”
However, as the development of 5G equipment is a lot higher than previous generations, Nokia has had to cut its financial outlooks and paused dividend payouts.
Interestingly the US, eager to decrease the influence of Huawei was very keen on a US company becoming a stakeholder in the Finnish company.
