Infinera's stock rockets 18% after $2.3 billion purchase by Nokia

By Claudia Assis

Deal represents a 28% premium over Infinera's share price

Shares of Infinera Corp. rallied 18% after hours Thursday after Finnish telecom giant Nokia Corp. said it has agreed to buy the San Jose, Calif.-based maker of optical telecom equipment for $2.3 billion.

Nokia's (FI:NOKIA) (NOK) deal would value Infinera (INFN) at $6.65 a share, a 28% premium over the share price at Wednesday's close and a 37% premium over the trailing 180-day volume weighted average price, the companies said.

Nokia would pay at least 70% of the consideration in cash, and Infinera's shareholders can elect to receive the remainder in Nokia American Depositary Shares, the companies said. Nokia's board committed "to increase and accelerate" Nokia's share buyback program to offset the dilution from the deal, they said.

The deal is expected to be accretive to Nokia's comparable per-share earnings in the first year post-close, and to deliver more than 10% comparable EPS accretion by 2027, the companies said.

The combined businesses are "a strong strategic fit given their highly complementary customer, geographic and technology profiles," Nokia Chief Executive Pekka Lundmark said, and with its EPS accretion it would create "significant value for shareholders."

"This combination will further leverage our vertically integrated optical semiconductor technologies," Infinera Chief Executive David Heard said in a statement. "Furthermore, our stakeholders will have the opportunity to participate in the upside of a global leader in optical networking solutions."

Shares of Infinera ended the regular trading session up nearly 2%, and are 11% higher so far this year, which compares with gains of about 15% for the S&P 500 index SPX.

-Claudia Assis

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06-27-24 2054ET

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