Is Nokia Eyeing to Acquire Juniper Networks?

Changes at Nokia, as well as a fresh influx of cash from the sale of its mobile device business unit to Microsoft (MSFT), may see the company known mostly for its mobile phone devices looking to merge with or acquire another company to build out its mobility infrastructure in the face of the software-defined networking (SDN) trend.

The latest rumor to surface, thanks to an article on Rethink Wireless, is that Nokia is taking a very close look at Juniper Networks (JNPR). Whether the plan is to offer a merger or acquisition deal is unknown, and it may simply be just a rumor, but the two companies already have a longstanding working relationship for infrastructure and transport.

Nokia is going to have approximately $7.5 billion in cash from its deal with Microsoft, which was signed in September 2013 and includes not just Nokia’s devices and services business, but also licenses for Nokia’s patents and mapping services.

But that probably isn’t going to provide enough capital to buy Juniper, which likely would push the $14 billion price tag mark.

According to the Rethink Wireless article, a discussion about a merger was in progress as early as the end of 2013, when Rajeev Suri, CEO of Nokia Solutions and Networks (NSN), travelled to the United States to chat with the folks at Juniper. Whether that was talk regarding a merger or just about a stronger alliance for transport is unknown, but if the talks were about a merger or acquisition, there may be some sense in those chats.

Forging a stronger alliance would be in the best interests of both companies, but a merger that brings about a Nokia-Juniper front could make a lot of sense. Nokia has certainly had its ups and downs over the years, and NSN has been focused on cutting costs in recent times. In Juniper’s case, it has experienced some issues holding onto talent in the last year; and it has become the target of investor Elliott Management, which managed to push Juniper’s board into accepting a $2 billion buyback proposal late last week.

Networking has changed significantly for both infrastructure and mobility vendors in the last few years, and with SDN about to become a pretty big deal in both the IT and telecommunications sector, a pairing of a major player in both spaces might work out well.

There’s still a lot to consider in such a merger, and it may turn out to be just rumors, but keep an eye on The VAR Guy for more about these vendors as news surfaces.