Nokia Oyj has denied a report that it is in talks to acquire Juniper Networks Inc. in a purchase that would see the Finnish giant diversify its networking business.

CNBC, quoting sources, claimed that Nokia is prepared to offer $16 billion for Juniper, roughly 40 percent above its market capitalization of around $11.12 billion at Wednesday’s close. How far the talks have progressed or whether there was an offer on the table was not mentioned in the report.

Responding to the report in a press release, Nokia outright denied the claim, saying that although it does not typically comment on market rumors, it felt the need to do so on this occasion. “Nokia is not currently in talks with, nor is it preparing an offer for, Juniper Networks related to an acquisition of that company,” the company clearly stated.

Despite the denial, Juniper would provide some natural synergies for Nokia, giving it a complementary switching and routing business that would fit nicely beside the telecom equipment business Nokia obtained when it acquired Alcatel-Lucent S.A. in 2016.

The acquisition of Juniper would also assist Nokia diversify its business at the time its core markets are weak as global 4G mobile buildouts dramatically slow. As Jim Kramer at The Street put it, “Juniper isn’t exactly immune to these challenges … [but] with its growing sales to cloud giants buying Juniper’s core routers and innovative QFX-series Ethernet switches, along with moderate enterprise sales growth,” Juniper’s sales are expected to rise slightly in 2017 and 2018.

A combined Nokia-Juniper business would also present a joint front with which to challenge the Cisco Systems Inc.-Ericsson AB partnership. Notably, Nokia Chief Executive Officer Rajeev Suri previously cited the challenge from Cisco-Ericsson as justification for the Alcatel-Lucent acquisition. Adding Juniper could and would only be an extension of that goal.

Juniper shares jumped 18 percent to $35 in after-hours trading following the report until Nokia denied the deal, driving the shares back down to $30 a share, a 2.43 percent premium on Juniper’s Wednesday closing price.

Photo: Grendelkhan/Wikimedia Commons