Speed Reads

Mergers and acquisitions

Nokia agrees to buy Alcatel-Lucent for $16.6 billion

On Wednesday, Finnish telecom heavyweight Nokia and France's Alcatel-Lucent announced plans to merge, with Nokia buying out its smaller rival in an all-stock deal worth about $16.6 billion. After the deal closes next year, Nokia shareholders will hold 66.5 percent of the company's stock, while Alcatel-Lucent shareholders hold the remaining 33.5 percent.

The combined company will be a telecom equipment and software powerhouse with 35 percent of the wireless gear market, according to Bernstein Research, competing against Sweden's Ericsson (40 percent) and China's low-cost rival Huawei (20 percent). Nokia, once the dominant smartphone maker, sold off its handset business to Microsoft last year and now mostly makes hardware and software that runs the wireless networks of major carriers like AT&T and Verizon. Alcatel-Lucent also has a strong foothold in the router business. Nokia says it won't cut jobs in France more than those already put on the chopping block by Alcatel.