Nokia is refuting a CNBC report that the company is going to purchase Juniper Networks, one of its closest rivals, for $16 billion.
The company said that while it does not typically comment on market rumors, it had to respond due to the specificity of press reports.
"Nokia is not currently in talks with, nor is it preparing an offer for, Juniper Networks related to an acquisition of that company,” Nokia said in a prepared statement.
Citing unnamed sources, the CNBC report revealed that the offer would value Juniper above its market capitalization of about $11.12 billion at the close of Wednesday trading.
Juniper would not provide a comment to CNBC, citing a policy against addressing "market speculation or rumors."
Wall Street liked the rumors of a potential tie-up with Nokia, sending up Juniper’s shares 19% in after-hours trading on the New York Stock Exchange.
Following its $16 billion deal for the former Alcatel-Lucent—one that reestablished Nokia in the wireline network with complementary last mile, optical and switching and routing—an acquisition of Juniper would make Nokia an even bigger threat to Cisco in the edge and core routing space.
Battling Cisco for greater dominance of the routing market is a tall order. According to Synergy Research’s third-quarter report, the San Jose-based routing vendor achieved a 51% share of the total market as of third-quarter 2017. Cisco’s shares range from 63% for enterprise routers to 38% for service provider routers.
At the same time, Cisco could have become an even larger company had the partnership with Ericsson it established in 2015 turned into a merger or acquisition. However, no such deal has taken place.
Being acquired by Nokia comes at a time when Juniper has been seeing its own share of struggles, particularly related to slower service provider customer spending. Juniper reported in its third-quarter earnings call that service provider customers delay spending as they begin shifting their networks toward a software-based architecture.
These delays prompted Juniper to lower its fourth-quarter guidance. However, the vendor said it remains confident that it could get a piece of new opportunities related to 5G wireless and SD-WAN.