Nokia gains on report Samsung is showing interest in its mobile networks assets

Nokia (NOK) shares rallied 4.5% Thursday following reports that Samsung Electronics is showing preliminary interest in the Finnish company's mobile networks assets.

According to Bloomberg, Samsung’s interest comes amid Nokia's discussions with advisers about potential options for its struggling mobile networks division, which has faced stiff competition from larger rivals like Huawei.

Bloomberg reported that Nokia has been exploring several scenarios, including selling parts or all of the division, spinning it off, or merging it with a competitor.

The mobile networks business, which supplies crucial telecom equipment like base stations and radio technology, accounted for about 44% of Nokia’s total revenue last year.

Despite its size, the division has struggled due to declining demand for 5G rollouts and delayed network upgrades by telecom operators, especially in Europe.

Samsung’s interest in Nokia’s assets could be part of a strategy to strengthen its position in the radio access networks market, which connects mobile phones to telecom infrastructure. Bloomberg noted that any potential divestiture could also attract interest from other industry players.

Nokia has been actively seeking ways to revitalize its business under CEO Pekka Lundmark, who has been steering the company towards new growth areas, including fixed networks and artificial intelligence.

Despite the challenges, a Nokia spokesperson reaffirmed the company’s commitment to the success of its mobile networks business, calling it "highly strategic" and highlighting recent progress in cost management and securing new deals.

Bloomberg cautioned that deliberations are still at an early stage. As a result, there is no certainty Nokia will decide to pursue any transaction.

Source: Investing.com