Nokia to form JV in China with Alcatel-Lucent

31 Aug 2015

Nokia has revealed plans to create a new joint venture combining Nokia China with Alcatel-Lucent Shanghai Bell, in a move that could indicate that the wider merger between Nokia and Alcatel-Lucent is on the way to approval.

Nokia revealed it has signed a memorandum of understanding with China Huaxin Post and Telecommunication Economy Development Center (China Huaxin) confirming plans to form the new joint venture.

China Huaxin, an industrial investment company, acquired Alcatel-Lucent's enterprise business last year in a €202 million ($227.05 million) deal

Under the terms of the proposed arrangement, Nokia will own 50% plus one share of the joint venture. Nokia and Alcatel-Lucent would also be entitled to fair value compensation for the assets they contribute to the JV. The final terms are still to be negotiated.

Comments from Nokia CEO Rajeev Suri suggest that the merger may help smooth the way for the global merger between Nokia and Alcatel-Lucent.

“With this MoU now in place, we will also work closely with our new partners to make the case for swift approval of the proposed combination between Nokia and Alcatel-Lucent by the appropriate Chinese authorities,” he said.

China is the last major jurisdiction yet to approve the proposed €15.6 billion share-swap merger of Alcatel-Lucent by Nokia. A merger in China could help the vendors make the case for a combination more directly.

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