Nokia and Siemens to Close Networking Merger on April 1

Press Release - March 16, 2007

Nokia and Siemens have confirmed a deal to merge their networking infrastructure divisions, with an expected completion date of April 1st. The agreement was initially set to close in January, but was delayed by a corruption scandal at Siemens.

The two companies will pool their respective networking assets into a 50-50 joint venture worth approximately €4.1 billion. Siemens is expected to contribute €2.4 billion of this (much more than initially expected), which some Finnish journalists are describing as a sort of indirect compensation to Nokia for delaying the merger by several months.

A Nokia spokesperson, however, described this as “a very extreme interpretation,” given that the assets will be owned by the joint venture and not Nokia itself.

Siemens and Nokia say that their new joint venture is starting with a fresh slate, and would have “zero tolerance for financial or other business misconduct.”

“Based on the results of a pre-closing compliance review, Nokia and Siemens have reached an agreement on compliance and control processes that are meant to become a benchmark for the entire industry,” the companies said in a statement.

Nokia Siemens Networks, as the joint venture is called, is expected to have combined annual sales of around €16 billion, and will employ an initial workforce of 60,000.