Alcatel-Lucent Surges On Reports Of Merger Talks With Nokia Networks

(RTTNews) - Shares of Alcatel-Lucent SA (ALU) surged 8 percent on Thursday after the French telecom equipment maker was reported to be in merger talks with Nokia Networks (NOK).

The companies resumed merger talks this fall, according to Germany's Manager Magazin quoting unidentified people with knowledge of the matter.

For long, Alcatel-Lucent and Nokia have had merger talks but without any conclusive results. In 2013, Nokia was reported to have mulled options including a combination with Alcatel-Lucent's wireless-networks business.

Nokia has been struggling to spur growth at its telecommunication network equipment business, and to stay trim, had divested its struggling handset business to Microsoft Corp. (MSFT) for about $7 billion.

The network equipment industry has been suffering for years under enormous competitive pressure. Under Chief Executive Rajeev Suri, Nokia has cut jobs; a path Alcatel-Lucent too has taken, including asset sales.

Manager Magazin said that Nokia, with its strength in wireless networks, could benefit from a tie-up with Alcatel-Lucent, with its fixed-line network assets.

Last month, Nokia said it expects sales growth in all segments for the year 2015.

Alcatel-Lucent is trading at $3.54, up $0.22 or 6.48%, on a volume of 8 million shares on the NYSE.

In Paris, the stock is trading at 2.88 euros, up 0.22 euros or 8.08%, on a volume of about 47 million shares.

Nokia is trading at $7.97, up $0.11 or 1.46%, on a volume of 7 million shares on the NYSE.