Nokia has set the stage for a provisional Chinese joint venture to be formed once its acquisition of Alcatel-Lucent is complete.
The Finnish firm has held talks with Chinese investment firm China Huaxin regarding a new firm to be formed from Nokia China and Alcatel-Lucent Shanghai Bell (ASB). Nokia has stated that the agreement is “conditional on and would be formed after the closing of Nokia’s planned combination with Alcatel-Lucent”.
Nokia would take a 50% plus one share in the venture, named Nokia Shanghai Bell – currently the amount that Nokia will own in ASB once it has fully acquired Alcatel-Lucent. The firm stated that “fair value compensation would be received for the contribution of relevant assets to the joint venture.”
Rajeev Suri, president and CEO at Nokia, said: “Together with China Huaxin, Nokia will be in an excellent position to support strategic initiatives of the Chinese government and provide a strong link between Europe and China.”
“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 added.
Nokia has proposed an acquisition of Alcatel-Lucent for €15.6 billion, and the deal is currently awaiting approval for the various global markets in which the firms operate. It already has the green light in Europe, India, Brazil and the USA, and could be wrapped up by the end of 2015.
Alcatel-Lucent and China Huaxin founded ASB in 1984 as “the first foreign investment joint venture in China’s high tech sector”.