Nokia has entered into a put option agreement with the French State, represented by the Agence des Participations de l'Etat, to sell its leading submarine networks business, Alcatel Submarine Networks, for an enterprise value of €350 million. This strategic move demonstrates Nokia’s commitment to active portfolio management, focusing on core assets and improving the profitability of its Network Infrastructure business group. Nokia will retain a 20% shareholding in ASN and board representation until a targeted exit to ensure a smooth transition.
By divesting ASN, a non-core standalone business, Nokia can better concentrate on growth opportunities within its core markets, enhancing the profitability of its Network Infrastructure business group. This transaction is a testament to Nokia’s active management of its business portfolio, aligning with one of its six strategic pillars. Starting from the second quarter, Nokia will account for ASN as a discontinued operation. Consequently, Nokia’s Network Infrastructure Business Group will comprise three units: Fixed Networks, IP Networks, and Optical Networks. This restructuring is expected to reduce the net sales of Network Infrastructure by approximately €1 billion while increasing 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.
ASN is a global leader in submarine communication networks, known for its turnkey systems. Under Nokia’s ownership, ASN has significantly grown its revenues and is well-positioned to continue benefiting from the growing demand for subsea cables. The proposed sale to the French State follows extensive discussions concluding that the French State is the most suitable custodian for ASN. As a stable owner with a long-term interest in maintaining critical infrastructure, the French State ensures continuity for ASN’s customers, employees, and partners.
The French State, through APE, has committed to maintaining investment in ASN and supporting the sustainable development of its vertically integrated technology offering. APE has a large portfolio of holdings across multiple sectors, ensuring that ASN will remain a strong French and European player in a globally competitive market. The sale is expected to close at the end of 2024 or the beginning of 2025, subject to formal consultation with ASN’s French Works Council and other customary closing conditions and regulatory approvals.
Pekka Lundmark, President and CEO of Nokia, stated, “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, commented, “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, added, “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.”
