Nokia (NOK) and Alcatel-Lucent (ALU) surprised on Tuesday by confirming that the rivals are in talks about a full potential combination. Although the companies said in a brief joint statement that there is no certainty the discussions will result in agreement or transaction, they are hashing out a deal that would see Finland-based Nokia make a public offer for France-based Alcatel-Lucent. BMO Capital Markets analyst Tim Long called the possible deal positive for the whole sector. He said a merger with Alcatel-Lucent would significantly broaden Nokia’s product set and allow for better restructuring of Alcatel-Lucent’s business. He has a Market Perform rating on Nokia, and an Outperform rating on Alcatel-Lucent.
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