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Skadden-led Nokia announced Thursday its agreement to sell its submarine network business, Alcatel Submarine Networks (ASN), to the French state for an enterprise value of €350 million ($375 million).

Nokia To Sell Submarine Network : Retaining Minority Stake

Nokia will retain a 20% share in ASN, ensuring board representation to facilitate a smooth transition until the company’s targeted exit. At that point, France will acquire Nokia's remaining interest, according to a statement from Nokia.

Focus on Core Markets

The sale of the "non-core standalone business" will allow Nokia to concentrate on its core markets and expand its network infrastructure business group. The Finnish multinational company, which focuses on mobile, fixed, and cloud networks, sees this move as a strategic alignment to strengthen its market position.

"This is a good step forward in our strategy of actively managing our portfolio," said Pekka Lundmark, president and CEO of Nokia. "ASN has been a standalone part of our network infrastructure business, and through the divestment, network infrastructure will benefit from a streamlined portfolio with a focus on growth and strengthening its technology leadership."

Nokia To Sell Submarine Network : Transition Timeline

The sale, to be executed through a put option, is expected to close at the end of 2024 or the beginning of 2025.

French State Acquisition

The French state, acting through its shareholding agency Agence des Participations de l'Etat (APE), is acquiring an 80% shareholding in ASN. "The French state is thrilled to announce its willingness to acquire 80% shareholding of ASN," stated Bruno Le Maire, French Minister of Economy. "The company is one of the world leaders in the submarine cable market, and the only company of its kind in Europe."

Strategic Benefits

Nokia described ASN as a leader in French and global submarine communication networks, uniquely positioned in turnkey systems. The business is expected to benefit from the increased demand for subsea cables.

Nokia To Sell Submarine Network : Legal Representation

Nokia is represented by Skadden Arps Slate Meagher & Flom LLP, with a team led by corporate partners Armand Grumberg and Pascal Bine. The team also includes tax partner Thomas Perrot, antitrust and competition partners Frederic Depoortere and Niels Baeten, and national security partner Michael Leiter. Counsel information for the French state was not immediately available.