Nokia on Friday announced the creation of Nokia Shanghai Bell thanks to a new deal with Alcatel-Lucent’s Chinese partner.
The Finnish firm has inked a memorandum of understanding with China Huaxin that will enable it to combine its Chinese infrastructure business with Alcatel-Lucent Shanghai Bell.
Nokia will take ownership of Alcatel-Lucent’s 50%-plus-one-share holding in Alcatel-Lucent Shanghai Bell on completion of their planned €15.6 billion merger, due to take place next year.
Its agreement with China Huaxin, which holds the remainder, will enable it to merge Nokia China with Alcatel-Lucent Shanghai Bell to create a new joint venture: Nokia Shanghai Bell. Nokia will hold 50% pl us one share.
Under the MoU the two companies have agreed that there will be "fair value compensation" for the contribution of the relevant assets to the JV, but have yet to work out the finer details. The MoU gives them nine months after the closure of the Nokia/ALU deal to reach a definitive agreement on the venture.
Nokia chief executive Rajeev Suri talked up the strengths of the new venture, focusing particularly on its ability to support various Chinese government initiatives.
"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," Suri added.
Nokia Shanghai Bell will have a single board of directors and management team, the companies confirmed, as well as unified customer and business functions, and one integrated product portfolio and R&D platform.
"By bringing these two entities together, the new company would possess greater capacity for innovation and outstanding R&D capabilities, delivering benefits to our customers and shareholders alike," said China Huaxin chairman Yuan Xin.
