FRANKFURT -(Dow Jones)- Siemens and Nokia, Monday said they will merge Nokia's Networks Business Group and the carrier-related operations of Siemens into a new company, confirming a report in the Wall Street Journal.
The new company will be called Nokia Siemens Networks, Siemens said.
Siemens said the 50-50 joint venture will create a global leader with strong positions in important growth segments of fixed and mobile network infrastructure and services.
The combined company is positioned to lead the development and implementation of revenue-generating and cost-saving products and services via its scale and global reach, Siemens said.
Nokia Siemens Networks will have one of the world's best research and development teams, with the ability to invest in next generation fixed and mobile product platforms and services.
The new company will have a world-class fixed-mobile convergence capability, a complementary global base of customers, a deep presence in both developed and emerging markets, and one of the industry's largest and most experienced service organization.
The transaction closing is expected to take place before January 1, 2007, and is subject to customary regulatory approvals, the completion of standard closing conditions, and the agreement of a number of detailed implementation steps.
After closing, the financial results of Nokia Siemens Networks will be consolidated by Nokia and accounted for at equity by Siemens.
Simon Beresford-Wylie, currently Executive Vice President and General Manager of Networks at Nokia, will assume the position of CEO immediately upon the closing of the merger. Peter Schoenhofer will assume the position of CFO. Schoenhofer is currently Member of the Executive Board of Siemens AG Austria.
Based on the 2005 calendar year, the combined company had EUR15.8 billion in pro forma annual revenues and is expected to start operations with 60,000 employees.
Estimated cost synergies are of EUR1.5 billion annually by 2010.
Nokia Siemens Networks will have its operational headquarters in the metropolitan area of Helsinki, Finland, and will have a strong regional headquarters in Munich, Germany, where three of the future five divisions of the new company will be based. Nokia Siemens Networks will be registered in the Netherlands.
Both Nokia and Siemens expect the impact of the partnership on their respective Earnings Per Share, on a pro forma basis excluding restructuring charges, to be accretive by the end of 2007 assuming a closing by January 1, 2007.
Furthermore, the Siemens managing board has decided to actively pursue the consolidation in the Enterprise Networks industry. Siemens is in negotiations with several interested parties to execute this strategy.
The Wireless Modules business will be integrated into the Siemens group Automation and Drives as of October 1, 2006.
(END) Dow Jones Newswires"
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