Nokia and Siemens announced a deal today that will combine their network equipment business into a new company valued at more than $30 billion, according to The Wall Street Journal. Each company will get a 50 percent stake in the new JV, which will be called Nokia Siemens Networks and could result in annual cost synergies of $1.9 billion by 2010. The merger is a result of heavy competition for network contracts from China as well as Alcatel and Lucent's recent merger to form a behemoth infrastructure company capable of squashing competition with cheaper pricing. Neither Nokia nor Siemens has faired extremely well when it comes to scoring network contracts. The new JV, which will be based in Nokia's homeland of Finland with Nokia controlling the majority of the board's seats, would equal the size of Ericsson and the combined Alcatel-Lucent. What's Nortel gonna do?
To read more about the new JV between Nokia and Siemens:
- check out this article from The Wall Street Journal (sub. req.)