Nokia has agreed to a joint venture with Chinese investment company China Huaxin with the ultimate goal of combining Nokia China with Alcatel-Lucent Shanghai Bell, Reuters reported Friday.
According to a press release from Nokia, the new agreement is “conditional on and would be formed after the closing of Nokia’s planned combination with Alcatel-Lucent, at which point Nokia would own 50% plus one share of ASB.” Though the Nokia-Alcatel merger is expected to close next year, China remains the last major jurisdiction that has yet to lend its approval to the $17.6 billion deal. The Alcatel deal has already been approved by markets in Europe, India, Brazil and the United States.
“We look forward to joining with China Huaxin and ASB to drive innovation for customers in China and to help accelerate the country’s shift to an innovation-driven economy,” Nokia president and CEO Rajeev Suri said in a statement Friday. “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.”
The new company would reportedly be overseen jointly by “one board of directors, one management team, unified customer and business functions, and one integrated product portfolio and R&D platform,” the release said.
“We are pleased to have signed this agreement with Nokia, and firmly believe the proposed combination would reinforce our companies’ presence in China,” said China Huaxin chairman Yuan Xin. “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.”