Wednesday, April 15, 2015

Nokia to Acquire Alcatel-Lucent for EUR 15.6 billion

Nokia agreed to acquire Alcatel-Lucent in a deal valued at EUR 15.6 billion -- a premium to shareholders of 28% (equivalent to EUR 4.27 per share) over the unaffected weighted average share price of Alcatel-Lucent for the previous three months.  Under the transaction Nokia will make an offer for all of the equity securities issued by Alcatel-Lucent, through a public exchange offer in France and in the United States, on the basis of 0.55 of a new Nokia share for every Alcatel-Lucent share. The boards of directors of both companies have agreed to the deal.

Nokia said it was motivated to do the deal because the addressable market of the combined company in 2014 was approximately 50% larger than its current addressable networks market, increasing from approximately EUR 84 billion to approximately EUR 130 billion. The combined company is expected to have a stronger growth profile than Nokia’s current addressable market, with an estimated CAGR of approximately 3.5% for 2014-2019.

Some highlights:

  • The combined company will be called Nokia Corporation, with headquarters in Espoo, Finland and a strong presence in France. It will also have major R&D centers in Germany, the U.S. and China. It will retain its Bell Labs brand in the U.S..
  • For France, Nokia said intends to maintain employment levels consistent with Alcatel-Lucent’s end-2015 Shift Plan commitments, with a particular focus on the key sites of Villarceaux (Essonne) and Lannion (Côtes d’Armor).  Plans also include a 5G R&D centre of excellence in France.
  • Risto Siilasmaa is planned to serve as Chairman, and Rajeev Suri as Chief Executive Officer.
  • The combined company would target approximately EUR 900 million of operating cost synergies to be achieved on a full year basis in 2019. The cost savings will come from organizational downsizing, elimination of overlapping products and services, centralized functions and regional sales organizations. The combined company could reduce overhead costs in real estate, manufacturing, supply chains, IT and overall G&A expenses, including public company costs.
  • The combined company would target approximately EUR 200 million of reductions in interest expenses to be achieved on a full year basis in 2017.
  • For FY 2014, the combined company would have had net sales of EUR 25.9 billion, a non-IFRS operating profit of EUR 2.3 billion, a reported operating profit of EUR 0.3 billion, R&D investments of approximately EUR 4.7 billion, and a strong balance sheet with combined net cash at  December 31, 2014 of EUR 7.4 billion.
  • For comparison in FY 2014, Ericsson had carrier revenues of approximately EUR 25.1 billion, Huawei had EUR 23.5 billion and Cisco had EUR 9.0 billion.
  • In China, Nokia would own Alcatel-Lucent’s 50% plus one share holding in Alcatel-Lucent Shanghai Bell, a company limited by shares supervised by the State-owned Assets Supervision and Administration Commission of China.  

Rajeev Suri, President and Chief Executive Officer of Nokia, stated: “Together, Alcatel-Lucent and Nokia intend to lead in next-generation network technology and services, with the scope to create seamless connectivity for people and things wherever they are. Our innovation capability will be extraordinary, bringing together the R&D engine of Nokia with that of Alcatel-Lucent and its iconic Bell Labs. We will continue to combine this strength with the highly efficient, lean operations needed to compete on a global scale. We have hugely complementary technologies and the comprehensive portfolio necessary to enable the internet of things and transition to the cloud.  We will have a strong presence in every part of the world, including leading positions in the United States and China."

Michel Combes, Chief Executive Officer of Alcatel-Lucent, stated: “A combination of Nokia and Alcatel-Lucent will offer a unique opportunity to create a European champion and global leader in ultra-broadband, IP networking and cloud applications. I am proud that the joined forces of Nokia and Alcatel-Lucent are ready to accelerate our strategic vision, giving us the financial strength and critical scale needed to achieve our transformation and invest in and develop the next generation of network technology."

Skyport Raises $30 Million for New Approach to Security

Skyport Systems, a start-up based in Mountain View, California, announced $30 million in Series B funding for its Hyper-Secured Infrastructure solutions.  Product plans have not yet been disclosed.

Skyport said it is working on a fundamentally new approach to security, which requires a fundamentally new approach to secure computing.  Its goal is to ensure the security of mission-critical IT and corporate assets.

“Network security models today have been compromised, due to reliance on perimeter security and static network policies that fail to address the current threat landscape,” said Stefan Dyckerhoff, CEO of Skyport Systems and managing director at Sutter Hill Ventures. “Skyport will use this funding to deliver a fundamentally new approach and solution to protecting business’ most mission-critical IT control infrastructure and applications.”

The new funding was led by Index Ventures, with participation from Intel Capital and existing investor Sutter Hill Ventures. The Series B round brings total Skyport funding to $37M.

  • Skyport is headed by Stefan Dyckerhoff, who previously was GM of routing and switching at Juniper Networks, which he originally joined as employee #33 working in chip design. 

Napatech Video: Conquer the Time-to-Market Challenge

The volume, variety and velocity of data in IT and telecom networks is increasing at explosive rates. Staying ahead of this data growth curve is a challenge, not only for switch and router vendors, but also the vendors of appliances that assure that the networks we are all rely upon are available and secure. Appliance vendors need to stay ahead of the curve in more ways than one. Not only do they need to ensure that they are capable of continuously increasing the capacity and performance of their products, but they also need to shorten the development cycle and time-to-market. Presented by Napatech.

See video:

Telefónica Germany Selects Coriant Smart Router

Telefónica Germany has selected Coriant's 8600 Smart Router Series and 8000 Intelligent Network Manager (INM) for its mobile backhaul network, including the integration of the O2 and E-Plus network infrastructures. The deployment will help Telefónica Germany expand coverage across a range of mobile backhaul locations.  Financial terms were not disclosed.

Coriant’s new high-capacity 8665 Smart Router will play a key role in Telefónica Germany’s converged network infrastructure. The 8665 is a 900 Gbps full duplex IP/MPLS router that supports high-density 1G/10G aggregation and 100G connectivity, with future scalability to 3 Tbps. Coriant said its SDN-ready 8600 Smart Router Series offers diverse platform options under a common management system for flexible backhaul deployment scenarios from cell sites – where the ultra-compact, IP-67 environmentally-hardened design benefits deployment – to high-capacity IP/Ethernet aggregation locations requiring 100G connectivity. It offers time/phase synchronization capabilities supporting LTE and LTE-Advanced networks. The 8000 INM network manager offers Telefónica Germany full end-to-end network management support and enhanced visibility and control across the network, with automated service configuration and unique testing tools that make the service creation and validation process extremely efficient, thus minimizing operational costs.

PLUMgrid Joins Canonical Ubuntu OpenStack Interoperability Lab

PLUMgrid has become an Ubuntu Cloud partner and a part of the Canonical OpenStack Interoperability Lab program.

PLUMgrid Open Networking Suite (ONS) provides virtual network infrastructure including SDN and NFV based on fully distributed, programmable architecture.

The Canonical OpenStack Interoperability Lab (OIL) in testing more than 3,000 cloud configurations on Ubuntu OpenStack each month. As part of OIL, PLUMgrid ONS will participate in the rigorous testing with Ubuntu OpenStack, making the combined solution easy for customers to deploy and use, along with solutions from over 30 other partner hardware and software providers.

"With our Canonical partnership, our focus is not only to ensure PLUMgrid Open Networking Suite integrates well with Ubuntu OpenStack, but to also make it extremely easy to deploy and use the overall OpenStack solution for our end users. Canonical, with its best-in-class infrastructure tools Juju and MaaS, is a great partner for us.  We are committed to simplifying user experience, and OIL gives us another level of interoperability testing and validation that ensures seamless integration across a wide variety of Ubuntu OpenStack configurations," stated—Kashif Iftikhar, Vice President of Business Development and Sales, at PLUMgrid.

ALU Passes 300 Million Milestone for DSL Ports

Alcatel-Lucent has passed the 300 million milestone for the total number of DSL ports shipped.

The company estimates that its equipment is used in at least 33% of current active DSL ports worldwide.