Nokia (NYSE:NOK) received antitrust approval from the Chinese Ministry of Commerce for its proposed $17.6 billion (€15.6 billion) purchase of Alcatel-Lucent (NYSE: ALU), clearing one of the last major hurdles to the deal. The two vendors agreed to several conditions to win approval from Chinese regulators.
According to Reuters, the Chinese commerce ministry said Nokia had agreed to meet certain conditions by Dec. 10, mainly relating to the use of wireless standards and patent licensing. The terms were in line with China's anti-monopoly regulation to ensure market competition isn't harmed by the takeover, the ministry said.
As part of its acquisition of Alcatel-Lucent, Nokia announced plans in August to create a joint venture in China with China Huaxin Post & Telecommunication Economy Development to combine Nokia's telecommunications infrastructure businesses in China with Alcatel-Lucent Shanghai Bell. Nokia has signed a memorandum of understanding with China Huaxin, under which Nokia would hold 50 percent plus one share in the new joint venture, which would operate under the English name Nokia Shanghai Bell.
"We are pleased to have received clearance from MOFCOM for our proposed acquisition of Alcatel-Lucent. Completion of the material antitrust reviews is another significant milestone in the transaction, as we ready ourselves for operating as a combined company," Nokia CEO Rajeev Suri said in a statement. "Through Nokia Shanghai Bell, we look forward to maintaining our deep commitment to China and playing a key role in the country's shift towards an innovation-driven economy."
Nokia and Alcatel-Lucent still need to win formal approval for the deal from the French government, but that is expected be a fairly smooth process, and the companies still expect the deal to close in the first half of 2016. Once Nokia gets approval from the French Ministry of Economy, it said it will proceed with the filing of the previously announced public exchange offer for Alcatel-Lucent securities. Once the offer period opens, the proposed transaction will remain subject to approval by Nokia shareholders and the successful closing of the exchange offer.
Earlier this month Nokia unveiled a new leadership team and organizational structure for the company post-merger, and of the 13-strong leadership team, 10 members will come from Nokia. Suri said earlier this month in an interview with the Times of India that the deal will create "the Western alternative to Huawei."
For more:
- see this release
- see this Reuters article
- see this FT article (sub. req.)
Related articles:
Nokia's Suri: Wireless integration will require 'heavy lifting' in Alcatel-Lucent deal
Nokia executives will dominate following Alcatel-Lucent merger
Nokia CEO gains French government approval for Alcatel-Lucent deal with R&D commitment
Nokia plans new China JV following Alca-Lu merger
Nokia moves closer to Alcatel-Lucent acquisition with key SEC filing
Nokia gets EU green light for Alcatel-Lucent acquisition