Infinera and Nokia expect merger completion in Q1 2025

In a recent SEC filing, Infinera Corporation (NASDAQ:INFN), currently trading near its 52-week high at $6.62 and commanding a market capitalization of $1.57 billion, disclosed that its anticipated merger with Nokia Corporation (HEL:HE:NOKIA) is expected to conclude in the first quarter of 2025.

According to InvestingPro analysis, the stock is trading above its calculated Fair Value, reflecting market optimism about the merger prospects. The merger, which will result in Infinera becoming a wholly owned subsidiary of Nokia, is pending regulatory approvals from the European Union and Taiwan, along with other customary closing conditions.

The agreement, initially announced on June 27, 2024, is subject to various terms and conditions. In the fourth quarter of 2024, the companies received many of the required regulatory approvals, moving closer to finalizing the merger. However, the completion is contingent upon the satisfaction of the remaining conditions outlined in the merger agreement.

While forward-looking statements in the filing suggest optimism for a timely closure of the deal, they also acknowledge the inherent risks and uncertainties that could affect the outcome. These include the possibility of not receiving the necessary regulatory approvals, potential termination rights under the merger agreement, and the impact of the merger on Infinera and Nokia’s operations, customers, and employee relations.

The filing also notes possible fluctuations in the stock prices of both companies during the pendency of the merger and emphasizes the attention and resources that Infinera and Nokia are dedicating to the process, which could divert focus from their ongoing business operations and opportunities. This comes as Infinera faces challenges, with InvestingPro data showing an 11.48% revenue decline in the last twelve months and negative earnings per share of $0.48. The company’s high EBITDA multiple of 142.12x suggests investors are pricing in significant merger-related upside potential.

The companies have cautioned that the merger is subject to risks such as litigation, market response, and the costs associated with the merger. Additionally, the filing includes a disclaimer about forward-looking statements, indicating that actual results could differ materially from those projected.

This update is based on the information provided in the SEC filing by Infinera, which was signed by Chief Financial Officer and Principal Accounting Officer, Nancy Erba, on January 31, 2025.

For deeper insights into Infinera’s merger implications and comprehensive financial analysis, InvestingPro subscribers can access the detailed Pro Research Report, which includes expert analysis of valuation metrics, financial health scores, and merger-specific implications among 1,400+ top stocks covered.

In other recent news, B.Riley has downgraded Infinera Corp ’s stock from Buy to Neutral, following its third-quarter earnings release. Infinera’s results fell short of market expectations, with quarterly sales reaching $354.4 million and a break-even EPS, missing consensus estimates of $413 million in sales and an EPS of $0.07. Despite this, Infinera saw a 16% quarterly growth in the Internet Content Provider segment and a slight improvement in gross margin, rising to 40.4%.

The company, currently being acquired by Nokia, reported a 9.7% year-over-year decrease in revenue, but a 3.4% rise quarter-over-quarter. The firm’s future prospects have been adjusted by B.Riley, which now anticipates a negative EPS for the years 2024 and 2025.

These are recent developments, reflecting the ongoing changes and adjustments in Infinera’s business operations and financial outlook. B.Riley’s maintained price target of $6.65 aligns with Nokia’s offer price for the company.

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