Boston, MA 02/21/2014 (wallstreetpr) – Juniper Networks, Inc. (NYSE:JNPR) and Nokia Corporation (ADR) (NYSE:NOK) are getting analysts and investors talking about their recently reported potential acquisition deal. Yet the companies are not letting out comments to confirm or deny the acquisition talks, thus sparking further speculations that a deal could indeed be in the making between them.
There are a lot of factors that could get Nokia interested in acquiring JNPR. However, it is not very clear or obvious why Juniper Networks, Inc. (NYSE:JNPR) might want a marriage with Nokia. But this is business, you know and anything can happen.
While the reported acquisition deal will only become official when it is made official, hopefully in the upcoming weeks or even months, looking at the possible result of the deal isn’t a farfetched thought. But just before then, something interesting is happening on the stocks of the two companies.
Stock action betraying the silence
Juniper Networks, Inc. (NYSE:JNPR) and Nokia have apparently decided to keep investors, analysts and perhaps consumers guessing what they might be cooking. However, their stock action bears more than meets the eye. Ever since news surfaced that the two companies are in talks for a possible deal to join forces, shares on both end have assumed an upward trend.
That the shares are going up could suggest that indeed a deal is in the offing and beyond that, it could help the companies gauge waters just how things might turnout for their respective stocks in the event that they eventually declare a deal.
Juniper Networks and NSN marriage
Juniper Networks, Inc. (NYSE:JNPR) could join Nokia Solutions and Networks (NSN) which is apparently the primary business of Nokia Corporation (ADR) (NYSE:NOK). This come after Nokia signed a sale agreement with Microsoft Corporation (NASDAQ:MSFT) for its devices and services arm.
It is reported that NSN boss Rajeev Suri late last year held discussions for a possible acquisition with Juniper Networks, Inc. (NYSE:JNPR) management. It is widely understood that Nokia is keen on boosting its network solutions footprint in the U.S. and that Juniper Networks, Inc. (NYSE:JNPR) comes across as the best answer towards that goal.
Financial implications of the deal
Juniper Networks, Inc. (NYSE:JNPR) currently carries market value of almost $14 billion while Nokia is valued roughly at $27 billion. Thus analysts are of the opinion that taking over Juniper will be a big gamble for Nokia, however, they don’t question the rational.
Nokia is getting nearly $7.4 billion from Microsoft from the sale of its handsets business. Perhaps a portion of the money could be staked out for acquisition of Juniper Networks, Inc. (NYSE:JNPR). But analysts also believe that Nokia could use the roughly $3.1 billion cash held by Juniper Networks, Inc. (NYSE:JNPR) to finance the acquisition.
