Finnish telecommunications giant Nokia has officially completed its €2.19 billion ($2.3 billion) acquisition of Infinera, a networking firm based in San Jose, California. This acquisition marks a significant step in Nokia’s strategy to expand its presence in the optical networking sector and data center market.
The deal, first announced in June 2023, received final approval from the European Commission on February 27, paving the way for the integration of Infinera into Nokia. As part of the acquisition, Infinera’s team will be absorbed into Nokia’s optical networks division. Infinera’s CEO, David Heard, will also join Nokia as the chief strategic growth officer within the company’s network infrastructure business.
Strengthening Nokia’s Optical Networking Capabilities
Pekka Lundmark, Nokia’s outgoing president and CEO, emphasized the strategic value of the acquisition, stating:
“This transaction will significantly improve our scale and profitability in optical networks and allows us to speed up the pace of innovation to meet the requirements of the AI era. The Infinera acquisition will accelerate our growth strategy in data centers and strengthen our presence both in North America and with webscale customers.”
With this acquisition, Nokia aims to enhance its position in the rapidly evolving data center market. The company has been actively working to expand its influence in this sector, seeing it as a key growth area.
Leadership Transition and Data Center Expansion
As Nokia integrates Infinera, the company is also undergoing a leadership change. Pekka Lundmark will step down as CEO on April 1, with Intel’s data center executive, Justin Hotard, set to take over the role.
Nokia has been making strategic moves to establish a stronger foothold in data centers. In October, Lundmark highlighted the company’s vision to expand its reach in this domain.
To support this expansion, Nokia extended its partnership with Microsoft Azure, providing data center routers and switches. Additionally, in December, Nokia collaborated with Kyndryl to offer advanced networking solutions and services to enterprises worldwide.
In September, Nokia introduced a new data center automation platform described as an “event-driven automation” (EDA) system. This platform aims to streamline data center operations and improve efficiency.
Future Outlook
The acquisition of Infinera reinforces Nokia’s commitment to innovation and expansion in the data center and optical networking industries. With new leadership on the horizon and a clear focus on AI-driven technologies, Nokia is poised to strengthen its market presence and drive future growth.
As the demand for high-performance networking solutions continues to rise, Nokia’s investment in optical networking and automation will likely play a crucial role in shaping the future of digital infrastructure worldwide.