Easy come, easy go. That is what often happens when it comes to the enthusiasm in some big mergers. Now it is becoming more and more evident that enthusiasm for the Nokia Corp. (NYSE: NOK) acquisition of Alcatel-Lucent SA (NYSE: ALU) is dying — and dying hard. In fact, 24/7 Wall St. wonders if this lack of enthusiasm and post-news share price trading might ultimately kill the deal.

24/7 Wall St. was amazed at the deal that Alcatel-Lucent agreed to in its acquisition by Nokia. We even listed our reasons for why Alcatel-Lucent was selling its long-term shareholders down the river in this deal.

Deals of this size are transformative mergers. The problems here go above and beyond just merging two tech giants. These are two tech giants that have endured massive change, general periods of decline, and massive amounts of global competition over the years. They will also be merging a Finnish company with a company that already had issues integrating the full French and American operations into a stable set of units.

Nokia is the acquirer, and while shares initially rose they are lower now than they were before the news reports broke that the two were in talks. In fact, Monday’s New York ADS trading was looking to be the fifth day of decline (down 2 cents at $7.60 mid-afternoon) after the deal was confirmed.

• April 17 $7.62
• April 16 $7.77
• April 15 $7.84
• April 14 $7.96
• April 13 $8.30
• April 10 $8.06
• April 09 $7.73

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Alcatel-Lucent shares were flat on Monday afternoon at $3.88, but its shares have drifted lower as well — and now offer no premium to when the news break first came that the two were in advanced talks:

• April 17 $3.88
• April 16 $3.96
• April 15 $4.02
• April 14 $4.93
• April 13 $4.35
• April 10 $4.04
• April 09 $3.87

Sadly, this removes what appears to be all of the merger premium. We have already outlined the equity analyst ratings, with Jefferies being the latest to downgrade Nokia to Hold from Buy on Monday. Now the credit ratings agencies have chimed in over the last two days, with a marginally positive bias:

• Moody’s changed its outlook on Nokia’s Ba2 rating to Stable from Positive. Moody’s also placed Alcatel-Lucent’s B3 corporate family rating on review for upgrades.
• Fitch Ratings indicated that the proposed merger between Nokia and Alcatel-Lucent is unlikely to significantly ease price competition. Fitch put Nokia’s ‘BB’ rating on Positive Outlook watch in the deal.
• S&P upgrades Nokia to ‘BB+’ with an Outlook Positive view; and S&P put Alcatel-Lucent’s ‘B/B’ ratings on Watch Positive on the Nokia news.

As a reminder, credit ratings often look for very different catalysts and points in making evaluations. Some of the equity analyst calls from last week were as follows:

• Alcatel-Lucent — downgraded to Neutral from Buy at Citigroup; Credit Suisse downgraded Alcatel-Lucent to Neutral from Outperform; Goldman Sachs removed it from the Conviction Buy List; UBS downgraded it to Neutral from Buy; and Bernstein cut the rating to Market Perform from Outperform.
• Nokia — downgraded to Neutral from Buy at Citigroup; removed from the Focus List at Credit Suisse. Morgan Stanley took the other side by raising it to Overweight from Equal Weight, and Bernstein raised Nokia to Market Perform from underperform.

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Some companies merge out of greed, and some companies merge out of need. You have probably guessed that this merger is one of need rather than greed — hence what is now becoming a near-zero premium.

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