EU Clears Nokia, Siemens To Merge Network Equipment Operations"

BRUSSELS -(Dow Jones)- The European Commission Monday cleared Finland's Nokia and Germany's Siemens to merge their phone network equipment businesses.

The commission said the deal won't create antitrust problems, since the combined companies will face strong competition from Ericsson and the merging companies Alcatel and Lucent Technologies.

The deal creates the world's third-biggest network firm to be called Nokia Siemens Networks.

The new company will be a 50-50 joint venture that will cover both fixed-line and mobile networks.

Nokia Siemens Networks is expected to have annual sales of EUR16 billion and make cost savings of EUR1.5 billion a year by 2010, mainly through the loss of around 9,000 jobs globally and through the pooling of research and development costs.

The value of the deal is estimated at around EUR25 billion.

When the deal was first announced in June, Nokia's new Chief Executive Olli-Pekka Kallasvuo said that as the communications industry consolidates, the new company will be well-positioned to manage the challenges of converging mobile, fixed-line and Internet technology.

-By Carolyn Henson, Dow Jones Newswires; +32 2 741 1484; carolyn.henson@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 13th November 2006