Was selling off its mobile manufacturing arm the best decision Nokia's management ever made? Following a generally positive reaction to its proposal to buy Alcatel-Lucent earlier this week, it's only gone and been upgraded by credit ratings agency Standard & Poor's...
In a statement today S&P said it was upgrading the Finnish former mobile manufacturer - now mobile equipment provider - from "BB" to "BB+" because of "solid operating results and free cash flow generation in 2014", as well as "resilient prospects for 2015". As a result, it raised its business risk assessment from "weak" to "fair".
A special mention was given to the €15.6bn Alcatel deal, announced on Wednesday (although heavily rumoured on Tuesday).
Despite being margin-dilutive and creating meaningful integration challenges in the near term, we view the proposed merger with French-American telecommunications equipment supplier Alcatel-Lucent overall as potentially credit-positive in the medium term.