February 26, 2020
Nokia is exploring strategic options, including possible asset sales or mergers, according to a new report from Bloomberg that cites unnamed sources familiar with the company's plans.
Nokia has hired advisers to weigh its options, the report noted. Nokia declined to comment on the report, and Bloomberg pointed out that Nokia's efforts may not result in any transactions.
The Bloomberg article speculates about the possibility of a merger between Nokia and Ericsson. However, it did not indicate that there are discussions between the two companies about such a transaction. The publication pointed out that a merger between Nokia and Ericsson would be difficult to consummate given all the European regulatory agencies that would be involved.
Nokia's shares rose roughly 6% in Wall Street trading in the hours following Bloomberg's report, though they have been trending downward during the past 12 months.
The Bloomberg report comes just weeks after Nokia warned investors that it would not complete its transition to more profitable 5G products until 2022. The company's CEO acknowledged Nokia lost some market share in 2019, with the company claiming about 27% of 4G and 5G radio access networks outside China at the end of the year. However, it aims to finish 2020 with the same share of business, and it has promised to provide updates on this new key performance indicator in all quarterly earnings reports this year.
Finland's Nokia, Sweden's Ericsson and China's Huawei are the three biggest wireless networking equipment suppliers in the world and are in a fierce battle over early 5G equipment contracts from operators.
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