Nokia Explores a Merger or Asset Sales
Finland based telecommunication network equipment manufacturer Nokia’ earnings have come under serious owing to extreme competition in the sector. In order to tackle the situation, the company is now exploring strategic options. According to a report from Bloomberg, Nokia (NYSE:NOK) is considering a range of options starting from sales of assets to a potential merger.
On the other hand, the company could also shift certain investments and make tweaks to the balance sheet. At this point in time, nothing is confirmed, and executives at the company are mulling a wide range of options in order to turn Nokia around.
Prior to the news of these developments inside the company, Nokia shares have lost more than 33% over the course of the past year. In October 2019, the problems with Nokia (NYSE:NOK) came to the fore, when Nokia decided to cut down its outlook and also suspended dividend payments.
At the time, the company stated that it did not believe that there was going to be any significant recovery in profits up until 2021. Since then, the company and it’s Chief Executive Officer Rajeev Suri have been under a lot of pressure to make a move in order to reverse the company’s fortunes.
Nokia shares rose over 6% to $4.15 on Wednesday after it emerged that Nokia (NYSE:NOK) is considering strategic options. It is being reported that one of the possible options for the company could be a merger with a rival like Ericsson AG. On the other hand, it could also partner with such a competitor in certain aspects of its business.
That being said, it should be noted that a move of that sort involving Ericsson might attract scrutiny from regulators and also lead to plenty of job losses. Ericsson refused to comment regarding the possibility of such a move. The discussions are still at an early stage, and the executives are possibly mulling a range of options. Hence, it could be worthwhile for investors to keep an eye on the stock over the coming days.
Source: Stock Market Press
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