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Nokia shares rise on report of potential mergers and transfers

(Reuters) – Shares in Nokia Oyj (NOKIA mobile phones.As HE grew into a bear market on Thursday, after Bloomberg News reported that the Finnish telecom network equipment maker, is considering a sale of assets or merger.

FILE PHOTO: Visitors gather outside on the Nokia stand at the Mobile World Congress in Barcelona, Spain, February 26, 2019. REUTERS/Sergio Perez/Photo File

Analysts at JPMorgan chase wrote in the immediate aftermath of the report, “If it’s exploring strategic options, it will only be viable for a sale to an unrelated Tech company, or a sale of assets.”

Shares of Nokia were up 1.1% higher in mid-day, in the city of Helsinki, while the European technology shares index .SX8P was 2.1% lower.

A Mirabaud Securities trader, said in the Bloomberg report, in support of the stock, most likely due to the activation of short-covering.

The report said that Nokia is considering strategic options, and was working with advisers on the potential sale of assets, merger, citing people familiar with the matter. It did not give any details.

A source close to the company said there was no truth in the report. Nokia declined to comment.

Nokia’s Technologies unit, which is the management of the company’s broad patent portfolio, is reported by 2019 operating revenue, an increase of 3% from a year ago to 1.24 billion euros ($1.35 billion), while sales slipped by 1% to 1.49 billion euro.

Nokia competes with Ericsson and Huawei (ERICb.PCS orders to the new 5G network is in the midst of a brewing technology, the war between the United States and China.

The new 5G wireless technology is expected to be the host of the critical roles of unmanned aerial vehicles and military communications.

The U.S. Attorney General, William Barr, said this month that the United States and its allies should think about investing in Nokia, Ericsson, at Huawei’s dominance in the 5G technology, fuelling speculation of merger and acquisition (M&A) activity.

In the mobile network industry has consolidated heavily over the last ten years, with Nokia’s purchase of Siemens as a company, as well as the acquisition of Alcatel-Lucent, so that there are only three players in the world.

Large telecom operators that refer to the three vendors, at a minimum, for the love of the game alive in the industry. They tend to use different vendors for their network.

In October, Nokia has cut its 2019 and 2020; profit outlook and stuck to dividend payments, saying that earnings will come under pressure if the company increases the investment in 5G technology.

Reporting by Tarmo Virki @virki; Additional reporting by Josephine Mason and Boleslaw Lasocki; editing by David Evans

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