Nokia and Siemens launch new company

Two companies embark on a joint venture by merging communications service provider divisions

Nokia and Siemens plan to merge the Networks Business Group of Nokia and the carrier-related operations of Siemens into a new company, to be called Nokia Siemens Networks.

The new company will be a "50-50 joint venture" and is expected to close before 1 January 2007, subject to customary regulatory approvals, the completion of standard closing conditions and the agreement of a number of detailed implementation steps.

Olli-Pekka Kallasvuo, chief executive of Nokia, said: "We believe the partnership with Siemens is the most effective way to build the scale and broad product portfolio necessary to compete globally and create value for shareholders. The communications industry is converging, and a strong and independent Nokia Siemens Networks will be ideally positioned to help customers lower costs and grow revenue while managing the challenges of converging technology." Olli-Pekka Kallasvuo will serve as chairman of Nokia Siemens Networks.

Klaus Kleinfeld, chief executive of Siemens, said: "This joint venture is an important step to strengthen our position in the market sustainably and to enable us to offer the best state of the art converged technologies and services to our customers," said "This combination creates a leading industry player with immediate strength, excellent potential for growth and well-positioned to improve future profitability."