Nokia and Siemens join forces

19 Jun 2006 | Nokia , Siemens | 0 comments


According to CNN, Nokia and Siemens have agreed to merge their telecom networks. Analyst value this deal at about $31.6 billion. Both companies are expected to control 50% of the newly founded company, called "Nokia Siemens Networks". The deal, which brings Nokia Siemens Networks within reach of giant Ericsson, would allow the companies to grow more quickly in a low-growth market. Around one in five mobile phone calls is already made via a Siemens or Nokia network.

Nokia and Siemens said they both expect to boost their earnings per share by the end of 2007 on a pro-forma basis before restructuring charges, which Beresford-Wylie said would total about 1.5 billion euros. But the parent firms decided the venture would not pay them dividends for the first two years. It will also help the companies get ahead in converged systems, the technology that allows fixed-line and mobile operations over the Internet.

The combination of Nokia's networks unit and the Siemens carrier business in fixed and mobile networks will offer some savings, and up to 9,000 jobs are due to be cut. They demanded job and workplace guarantees for the affected staff and said agreements about working conditions currently in force should be taken over by the joint venture.