Nokia has reached an agreement to acquire Infinera, a provider of network solutions, in a deal worth $2.3 billion. This move strengthens the Finnish telecommunications company's focus on its fiber optic network business.

Nokia, known for its 5G mobile antennas and other telecommunications infrastructure, stated that the combination with Infinera is expected to accelerate the path to double-digit operating margins in the fiber optic network business. The transaction, along with the recent sale of submarine cable networks, will realign Nokia's network infrastructure business and focus on fixed networks, internet protocol networks, and fiber optic networks, according to the company.

The deal, valued at $6.65 per share, represents a 28% premium on Infinera's closing stock price on Wednesday. At least 70% of the consideration will be paid in cash, and Infinera shareholders can choose to receive up to 30% of the remaining amount in the form of Nokia American Depositary Shares (ADS).

The enterprise value of the $2.3 billion deal includes the repurchase of Infinera's convertible bonds valued at $760 million.

Nokia expects that the business will make a positive contribution to comparable earnings per share in the first year after the agreement is concluded and achieve a comparable EPS increase of over 10% by 2027.

The company announced that the board has committed to increasing and accelerating the share buyback program to offset dilution from the business.

The takeover was approved by the boards of both companies and is expected to be completed in the first half of 2025.