Nokia has signed a put option agreement with the French State contemplating the sale of ASN for an Enterprise Value of EUR 350 million, subject to informing and consulting with relevant employee representative bodies. This proposal:

• Demonstrates Nokia’s commitment to active portfolio management and focus on key strategic assets.
• Focuses the portfolio and improves profitability of the Network Infrastructure business group.
• Ensures continued development of a strategic, market-leading French and European business.
• ASN is well-positioned to build on the transformation achieved under Nokia.
• Nokia will retain a 20% shareholding and board representation until targeted exit to ensure a smooth transition.

Nokia  announces it has entered into a put option to sell Alcatel Submarine Networks (ASN), a leading submarine networks business, to the French State, represented by the Agence des participations de l’Etat (APE), subject to informing and consulting with the relevant employee representatives at ASN and Nokia. Nokia will retain a 20% shareholding with board representation to ensure a smooth transition until targeted exit, at which point the French State would acquire Nokia’s remaining interest.

By divesting ASN, a non-core standalone business for Nokia, Nokia can focus its Network Infrastructure portfolio on growth opportunities in its core markets and further improve profitability of the Network Infrastructure business group. The transaction demonstrates Nokia’s active management of its business portfolio, one of the company’s six strategic pillars.

Beginning with the second quarter, Nokia expects to account for ASN as a discontinued operation. Going forward, Nokia’s Network Infrastructure Business Group will comprise three units: Fixed Networks, IP Networks and Optical Networks. This is expected to reduce the net sales of Network Infrastructure by approximately EUR 1 billion but will increase its operating profit margin by 100 –150 basis points. This does not impact Nokia’s previously stated financial outlook disclosed in its Q1 2024 financial report on 18 April 2024.

ASN is a French and global submarine communication networks leader, uniquely positioned in turnkey systems. Under Nokia’s ownership, ASN has significantly grown revenues, and is well positioned to continue benefiting from the growth of the large and attractive subsea cables market as the demand for, and importance of, subsea cables has increased.

The proposed sale of ASN to the French State is the result of extensive discussions which concluded that the French State is the most relevant custodian of ASN. The French State, as a stable owner with a long-term interest in the operation and maintenance of critical infrastructure, ensures continuity for ASN customers, employees, and partners.

Recognizing the importance of ASN’s heritage, operations and relationships with its key stakeholders, the French State has made clear its full support for ASN’s management and strategy, and has agreed to maintain investment in the ASN business and to support the further sustainable development of its vertically integrated technology offering.

As the French State’s shareholdings agency, the APE has a large portfolio of holdings across multiple industrial sectors, services and businesses, and serves global clients. Under the APE’s ownership of ASN, the French State will secure the future of a strong French and European player in a globally competitive market.

The sale is expected to close at the end of 2024 or beginning of 2025, subject to formal consultation of ASN’s French Works Council and other customary closing conditions and regulatory approvals.

Pekka Lundmark, President and CEO of Nokia, said: “This is a good step forward in our strategy of actively managing our portfolio. ASN has been a standalone part of our Network Infrastructure business and through the divestment, Network Infrastructure will benefit from a streamlined portfolio with a focus on growth and strengthening its technology leadership. ASN has gone through a significant transformation in recent years and has a strong market position. I am pleased we have found a natural owner for the business. The French State will ensure continued investment in ASN and protection of critical industry know-how.”

Alain Biston, President and CEO of ASN, said: “This is an incredibly exciting moment for ASN as we undertake the next phase of our development. The French State’s ownership gives us a stable platform to further develop our vertically integrated technology offering. This, combined with Nokia’s retained stake, underscores all parties’ aligned interests in delivering a smooth transition for the benefit of our customers, suppliers and other stakeholders.”

Bruno Le Maire, French Minister of Economy, said: “The French State, represented by the Agence des Participations de l’Etat (French shareholding Agency), is thrilled to announce its willingness to acquire 80% shareholding of ASN. The Company is one of the world leaders in the submarine cable market, and the only company of its kind in Europe.”

Advisors

BNP Paribas is serving as financial advisor to Nokia, Skadden is serving as legal counsel, and RELIANS (Pascal Dupeyrat, Jean-Christophe Martin) is serving as strategic and institutional advisor.