Infinera completes merger with Nokia, ceases Nasdaq trading

In a significant move within the telecommunications industry, Infinera Corp (NASDAQ:INFN), with a market capitalization of $1.57 billion and annual revenue of $1.46 billion, has finalized its merger with Nokia (HE:NOKIA) Corporation (NYSE:NOK), as detailed in an 8-K filing with the U.S. Securities and Exchange Commission. According to InvestingPro data, Infinera was trading near its 52-week high of $6.92 before the merger, despite facing an 11.5% revenue decline over the past year. On the closing date, February 28, 2025, Infinera became a wholly owned subsidiary of Nokia.

The merger agreement, originally disclosed on June 27, 2024, has led to the cessation of trading of Infinera’s common stock on the Nasdaq Global Select Market prior to market opening today. This step follows the conversion of each issued and outstanding share of Infinera’s common stock into a choice of cash, Nokia American Depositary Shares (ADS), or a combination of both, depending on the stockholders’ election. The company entered this merger with a debt-to-equity ratio of 5.52 and a current ratio of 1.58, indicating its financial position before the transaction.

Stockholders who did not specify their preference received $6.65 in cash per share, without interest. However, due to the overwhelming preference for Nokia ADSs, a proration mechanism was applied, resulting in approximately 58% of shares for which the Nokia ADSs or mixed consideration was elected, being converted into the cash consideration instead.

In connection with the merger, Infinera has also entered into supplemental indentures related to its 2.50% Convertible Senior Notes due 2027 and 3.75% Convertible Senior Notes due 2028. The Convertible Notes are no longer convertible into Infinera common stock but into a combination of cash and Nokia ADSs.

Furthermore, all outstanding obligations under Infinera’s Loan Agreement were repaid, and the agreement was terminated. This Loan Agreement previously provided for a senior secured asset-based revolving credit facility of up to $200 million.

Infinera’s Board of Directors, as of immediately prior to the merger, including George A. Riedel, Christine B. Bucklin, Gregory P. Dougherty, and others, have ceased to be directors following the merger.

The merger has also prompted Infinera to commence offers to purchase for cash any and all of its outstanding 2027 and 2028 Convertible Notes, following the occurrence of a "Fundamental Change" as defined in the Convertible Notes Indenture.

This transaction represents a significant change in control for Infinera, with the company now operating as a subsidiary of Nokia. The information provided in this article is based on the 8-K filing by Infinera Corp. For deeper insights into similar market-moving events and comprehensive financial analysis, including access to over 1,400 detailed Pro Research Reports, visit InvestingPro.

In other recent news, Nokia’s $2.3 billion acquisition of Infinera has received unconditional approval from the European Union Commission. The commission announced that the merger did not raise any competition concerns, as the combined market share of Nokia and Infinera in optical transport equipment would remain moderate. This acquisition positions Nokia as the second-largest vendor in the optical networking market, with a 20% market share. The deal, initially announced in June 2024, is expected to be completed in the first quarter of 2025, pending additional regulatory approvals from Taiwan and other customary conditions. An SEC filing by Infinera highlighted that most required approvals have been received, although some risks and uncertainties remain. The companies have cautioned about potential litigation, market response, and merger costs. Despite these challenges, both Nokia and Infinera are dedicating significant resources to ensure the merger’s completion. The acquisition is anticipated to strengthen Nokia’s presence in the optical networking sector.

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