ALU Merger Boosts Share Prices

Alcatel-Lucent S.A., a French global telecommunications equipment company, was recently acquisitioned by Nokia Corporation. Prior to the merging of the two companies, Alcatel provided Internet protocol (IP) and cloud networking, as well as ultra-broadband access across the globe.

I Know First wrote a Seeking Alpha article about Alcatel-Lucent (ALU) on July 15th, 2015. The article argued that ALU stock would rise, in accordance with the algorithm’s bullish signal, for a couple of reasons. A new partnership the company forged with Nokia, along with two contracts solidifying a presence in China were thought to make ALU a global force in mobile equipment in the coming year. Since the article was written, ALU stock shares have gone up 15%.

In early 2015, Nokia (NYSE: NOK) announced interest in acquiring Alcatel-Lucent in the coming year. Initially, investors were concerned about intense market competition and soft demand. Analysts also voiced apprehension, warning that competitors may attempt to exploit uncertainty held by consumers.

Despite these concerns, the merger has gone smoothly and approval has already come from global regulators. China’s Ministry of Commerce gave conditional approval, based mainly on patent licensing as well as a proposed joint venture between Nokia and China’s state-owned Huaxin. French regulators have also given approval at the point, and the new structure between the companies is taking firmer shape.

Alcatel share prices rose another 2.6% in the last trading season as the integration between the companies solidifies. Analysts, now, are praising the relative strengths of the companies and how they compliment each other. While Alcatel-Lucent specializes in routers and equipment used in making broadband networks, Nokia is known mainly for their work in wireless networks.

Both Alcatel-Lucent and Nokia shareholders have seen rises in stock prices since the article was posted.