Nokia Oyj has acquired French telecommunications equipment company Alcatel-Lucent SA for $16.6 billion.

The acquisition is an all share deal with Nokia offering 0.55 of a new Nokia share for every Alcatel-Lucent share. Alcatel-Lucent shareholders will end up owning 33.5 percent of the fully diluted share capital of the combined company, with Nokia shareholders naturally owning the remaining 66.5 percent.

The new company, to be called Nokia Corporation, would target approximately €900 million ($956 million) in operating cost synergies to be achieved on a full-year basis in 2019, with €200 million ($212 million) in reductions in interest expenses to be achieved on a full year basis in 2017

Nokia said in a statement that the combined company would be uniquely positioned to create the foundation of “seamless connectivity for people and things wherever they are.”

“Together, Alcatel-Lucent and Nokia intend to lead in next-generation network technology and services, with the scope to create seamless connectivity for people and things wherever they are” CEO and President of Nokia, Rajeev Suri said.

“Our innovation capability will be extraordinary, bringing together the R&D engine of Nokia with that of Alcatel-Lucent and its iconic Bell Labs. We will continue to combine this strength with the highly efficient, lean operations needed to compete on a global scale.”

Michel Combes, Chief Executive Officer of Alcatel-Lucent, added that “a combination of Nokia and Alcatel-Lucent will offer a unique opportunity to create a European champion and global leader in ultra-broadband, IP networking and cloud applications.”

Despite concerns that the ultra-socialist xenophobic French Government may block the deal, according to Reuters it surprisingly has its blessing.

As part of the deal, and to allay French fears, Nokia said it intends to launch a €100 million ($106 million) investment fund that will focus on French startups in the Internet of Things (IoT) space, along with the industrial Internet area.

With roots going back as far is 1898 (through Alcatel,) the company was the result of a merger of both Alcatel and Lucent in 2006. As well as being a huge, global provider of fixed, mobile, converged networking hardware, IP technologies, software, and services, it also owns Bells Labs, the famed one time division of AT&T that has delivered an amazing variety of technologies over the years, resulting in its employees winning eight Nobel prizes.

photo credit: Nokia via photopin (license)