Nokia will buy Alcatel-Lucent for € 15.6 billion: the deal was approved by China, the United States and the European Commission

    Finnish telecommunications equipment maker Nokia, which sold its telephone business to Microsoft, buys French-American company Alcatel-Lucent for 15.6 billion euros.

    The companies have received the approval of the European Commission, US regulators and the People's Republic of China. Once approved by the French authorities, Nokia will make a formal offer to purchase.


    In April 2015, Nokia and ALcatel-Lucent signed an agreement on the Finnish company ’s intention to buy a French-American electronics manufacturer. Payment will be made by Nokia shares, for each Alcatel-Lucent security, investors will receive 0.55 of Nokia's security. The deal will amount to 15.6 billion euros, and after it Alcatel-Lucent will cease to exist as a separate company.

    Nokia CEO Rajiv Suri said in June 2015 that the company will return to the development of mobile devices from 2016. According to the agreement with Microsoft, under its brand, the company will not be able to produce smartphones until 2023, that is, within ten years after the transaction. And under another brand, Nokia will be able to release smartphones at the end of 2015.

    In 2004, Alcatel’s mobile phone company and a similar branch of the Chinese company TCL established a joint venture, TCL & Alcatel Mobile Phones Limited (TAMP). 55% of the shares in this company had TCL, 45% - Alcatel. All Alcatel phone factories have been relocated to China. In 2005, TCL bought back the remaining shares of the joint venture from Alcatel and entered into a 10-year license agreement. TAMP has been renamed TCT Mobile Limited. [1]

    Alcatel-Lucent arose on December 1, 2006 as a result of the merger of Alcatel and Lucent Technologies. Alcatel has been operating in the telecommunications equipment market since 1898, and Lucent Technologies was separated in 1996 from AT&T: it included Bell Labs and Western Electric. Bell Labsexists now, while it is the research center of Alcatel-Lucent Corporation, and after the transaction will be transferred to Nokia. Bell Lab scientists have been awarded seven Nobel Prizes. In 2004, the Chinese company TCL opened a joint production with Alcatel for the production of mobile phones, and later acquired the joint venture and entered into a license agreement for ten years.

    Alcatel’s Nokia takeover deals with competition authorities and trade commissions in four countries or national entities. The USA is the largest market. The European Union is the second largest market. Production will be organized in the People's Republic of China. The French authorities must approve the deal, since the headquarters of Alcatel-Lucent is located in this country.

    In July 2015, the European Commission approved the deal. According to the commission, the situation in the field of competition in this case will not worsen, since the parties to the transaction are not close competitors. Nokia does not manufacture smartphones and tablets since it has sold this part of its business to Microsoft.

    In mid-October, the deal was approved by the US Foreign Investment Committee, before it was done by the US Department of Justice.

    On October 19, the deal was approved by the Ministry of Commerce of the People’s Republic of China. In a press releaseNokia notes that as part of the Alcatel-Lucent takeover, the company will establish a joint venture in China with the China Huaxin Post & Telecommunication Economy Development Center. This will integrate Nokia's telecommunications infrastructure business with Alcatel-Lucent Shanghai Bell (ASB). Nokia’s share in the joint venture will be 50% plus one share.

    Now companies will have to receive formal approval of the transaction from the French Ministry of Economy, after which Nokia will make an official offer to purchase Alcatel-Lucent. The companies plan to complete the deal in the first half of 2016.

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