Feeds

Commission green lights Nokia-Siemens equipment merger

'Consumers will still have choice'

Security for virtualized datacentres

The European Commission has given the green light to the proposed merger of Nokia and Siemens' network equipment business. The commission said the €25bn deal would not adversely affect the competitive landscape.

The deal creates a joint venture company, Nokia Siemens Networks, which will be equally held by Nokia and Siemens. It merges the network equipment businesses of both firms.

The commission has conducted a market investigation since the deal was announced in June and has concluded that competition in the sector is strong enough to cope with such a powerful new player. The combined company will rank third in its market.

"The main competitive impact of the proposed transaction would be in the mobile network equipment sector, since Nokia has few activities in fixed-line telecommunications," a commission statement said. "The commission's market investigation revealed that, despite the considerable market shares the merged entity would have in the mobile network equipment sector, the market structure would remain competitive."

The commission concluded that customers of the firms would still have a choice. "A sufficient number of credible competitors would remain in the market, inter alia market leader Ericsson and Alcatel-Lucent. Customers, mostly network operators, would still have alternative suppliers."

Though it involves assets of around €25bn, the transaction will not involve any cash payments. Nokia and Siemens will equally own the company, and it will have a Nokia executive as chief executive and a Siemens executive as chief financial officer.

Nokia's network equipment business makes base stations and switching equipment for the routing of mobile phone calls. The Siemens equipment business is thought to involve equipment more concerned with the routing of fixed line traffic, including voice calls and internet traffic, around networks.

It is thought that up to 9,000 jobs could be lost as part of the deal because the companies plan to share research and development tasks. The combined company expects to make cost savings through the deal of around €1.5bn a year by 2010 and to have revenues this year of just under €16bn.

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Intelligent flash storage arrays

More from The Register

next story
FCC, Google cast eye over millimetre wireless
The smaller the wave, the bigger 5G's chances of success
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
Mobile coverage on trains really is pants
You thought it was just *insert your provider here*, but now we have numbers
Don't mess with Texas ('cos it's getting Google Fiber and you're not)
A bit late, but company says 1Gbps Austin network almost ready to compete with AT&T
HBO shocks US pay TV world: We're down with OTT. Netflix says, 'Gee'
This affects every broadcaster, every cable guy
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.