Nokia Oyj has agreed to acquire Infinera Corp in a transaction valuing the maker of optical telecommunications equipment at US$2.3 billion including debt.

The cash-and-stock deal will value Infinera at US$6.65 a share, a 37% premium to the trailing 180-day average of the San Jose, California-based company’s share price, according to a statement on Thursday.

At least 70% of the deal will be paid in cash, with the rest consisting of Nokia’s American depositary shares, according to the statement confirming an earlier report by Bloomberg News.

Infinera’s stock had risen 15% over the past 12 months, giving the company a market value of about US$1.2 billion. The shares, which closed on Thursday at US$5.26 each, jumped as much as 25% after the close of regular trading.

Infinera provides networking hardware and software to mobile phone operators, Internet content providers and governments, among others, according to its website. The company is led by chief executive officer David Heard.

The acquisition is the largest for Finland-based Nokia since its biggest-ever deal, the €10.6 billion (US$11.4 billion or RM53.49 billion) takeover of Alcatel-Lucent completed in 2016, according to data compiled by Bloomberg. Earlier on Thursday, Nokia said in a statement that the French government plans to purchase its Alcatel Submarine Networks, with an enterprise value of €350 million.

Nokia said in January that it might see a pickup in the second half of the year, as its internet network infrastructure business brings in sales and cost-cutting measures pay off. It expects “strong improvement” in its network infrastructure business, which includes building submarine cables, terrestrial broadband and fibre optic technology.

PJT Partners served as the financial adviser to Nokia, while Infinera was advised by Centerview Partners LLC, according to the statement.

  - Bloomberg