Nokia and industrial investment company China Huaxin agreed to establish a joint venture combining Nokia China and Alcatel-Lucent Shanghai Bell (ASB) once the proposed merger of the Finnish equipment manufacturer with Alcatel-Lucent has been closed.
The move, which appears to resolve the question of what would happen to the European vendors' respective China-based assets following their merger, will see Nokia holding 50 per cent plus one share in the new joint venture, with China Huaxin holding the remainder. The proposed combination will require approval from Chinese authorities.
Nokia stressed that the new joint venture "is conditional on and would be formed after the closing of Nokia's planned combination with Alcatel-Lucent." Under the terms of a memorandum of understanding, the new venture would operate under the English name of Nokia Shanghai Bell and would be registered in the China (Shanghai) Pilot Free Trade Zone.
Rajeev Suri, president and CEO of Nokia, stressed that the agreement serves to underline Nokia's commitment to China, where both Nokia China and ASB have been operating separately for some years.
"Together with China Huaxin, Nokia will be in an excellent position to support strategic initiatives of the Chinese government such as 'Internet Plus' and provide a strong link between Europe and China. We look forward to joining with China Huaxin and ASB to drive innovation for customers in China and to help accelerate the country's shift to an innovation-driven economy," Suri said.
Nokia announced in April that it intended to acquire Alcatel-Lucent in a €15.6 billion ($17 billion) deal. It took a further step towards closing the proposed deal earlier this month after it filed a preliminary draft of a registration statement on Form F-4 with the U.S. Securities and Exchange Commission. The first major hurdle was cleared in July, when the European Commission gave its approval.
As things stand, the transaction is expected to close in the first half of 2016.
For more:
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