- Nokia (NOK) is expected to receive unconditional EU antitrust clearance for its $2.3 billion acquisition of Infinera (INFN), boosting its position to become the second-largest vendor in the optical networking market with a 20% share.
- The acquisition will enhance Nokia’s ability to supply equipment to tech giants like Amazon (AMZN), Alphabet (GOOG, GOOGL), and Microsoft (MSFT), who are investing heavily in data centers to support the AI boom, leveraging Infinera’s expertise in intra-data center communications.
- With 60% of Infinera’s business coming from the U.S., the deal aligns with Nokia’s strategy to expand in a market where optical networking solutions are increasingly vital, with Nokia aiming to close the acquisition in the first quarter of this year.
Reuters reports that Nokia’s (NOK) $2.3 billion acquisition of Infinera Corp. (INFN), a U.S.-based leader in optical semiconductors and networking equipment, is poised to receive unconditional EU antitrust clearance. This strategic move, announced in June last year, positions Nokia to become the second-largest vendor in the optical networking market, capturing a 20% share, trailing only Huawei, which has capitalized on limited Western competition in China. Infinera’s strong foothold in intra-data center communications, particularly server-to-server interactions, is significant, with about 60% of its business stemming from the United States.
The acquisition aligns with the surging demand for optical networking solutions driven by the artificial intelligence boom, as major tech companies like Amazon (AMZN), Alphabet (GOOG, GOOGL), and Microsoft (MSFT) pour billions into constructing new data centers. The report notes that Nokia’s expanded capabilities through this deal will enhance its ability to supply these tech giants with the necessary equipment to support their AI-driven infrastructure expansions. This market dynamic underscores the strategic importance of the acquisition, enabling Nokia to tap into a rapidly growing sector where optical technologies are critical for high-speed, efficient data transmission within and between data centers.
The report also notes that the European Commission, tasked with reviewing the deal, is expected to complete its preliminary assessment by February 26. Nokia, in its January 30 financial statement, expressed confidence in closing the deal within the first quarter of this year, signaling optimism about regulatory approval and integration plans. This acquisition not only strengthens Nokia’s market position but also reflects broader industry trends where AI and data center investments are reshaping the competitive landscape, pushing companies to scale and innovate to meet escalating technological demands.
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