Nokia Oyj officials are exploring the possibility of acquiring France-based Alcatel-Lucent, a global telecommunications equipment company, Bloomberg reports.
The former company is said to be in advanced negotiations with the latter in order to compete against industry rival Ericsson, which is based in Sweden.
An unnamed source revealed to the site that Nokia is expected to make an announcement this week about a purchase agreement, which is expected to only affect Alcatel-Lucent's mobile division. Although a full acquisition is possible, a partial takeover is said to be more likely. Nokia is also awaiting approval from the French government for the sale of Alcatel-Lucent's assets, Bloomberg also reports.
The Finish company is also said to be in talks to sell its "HERE" subsidy, which focuses on mapping and location intelligence business.
"Nokia stated it is not religious about holding onto the HERE navigation business and that it would seriously entertain offers, if any were made given that HERE has almost no synergies with the other businesses," Citigroup analyst Ehud Gelblum said, according to Barrons.
"In the meantime, Nokia confirmed what we already suspected that with scale, op margin on HERE could go well north of the current 8-12% level. We suspect HERE's gross margin is in the 75%+ range and that op margin could get as high as 30-35% or greater."
Nokia was founded in 1865 and incorporated in 1871.
