Europe says Nokia taking over Alcatel-Lucent wouldn't raise competition concerns, removing one more hurdle to the proposed €15.6bn merger.
The European Commission said today that it has found no cause for concern about the merger, given the limited overlap between the two companies' product sets and markets, despite merged business having a greater than 30 percent share in some sectors of radio access networks (RAN) and core networks.
"The Commission concluded that the transaction would not raise competition concerns, in particular because the parties are not close competitors and since a number of strong global competitors will remain active after the transaction," the commission said in a statement today.
The EC in June asked networking customers whether ZTE and Samsung could be considered reliable alternatives in the RAN business.
"Although ZTE and Samsung currently have small market shares, the Commission considered that those market shares do not fully reflect the competitive importance of their offerings," the commission said today.
"In particular, Samsung is expected to play a more significant role in the near future in relation to the newest generation mobile telecommunications equipment (so-called 4G, currently being deployed, and 5G)," it added.
The other factor behind the EU's decision was that Nokia was a more powerful player in the European Economic Area, where Alcatel-Lucent is a small player, while Alcatel-Lucent was stronger in North America, where Nokia's activities are "rather limited".
The EU's approval removes a significant regulatory hurdle and follows the US Justice Department's decision in June to also give its nod to the merger.
Nokia confirmed today that the merger has also been cleared by antitrust authorities in Albania, Canada, Colombia and Russia, following earlier approval in Brazil and Serbia.
"Both companies will continue to cooperate with the remaining authorities to close their reviews as quickly as possible," Nokia said in a statement.
The next key market it needs approval for is China, home to Huawei and ZTE, where regulators held up Microsoft's acquisition of Nokia's devices business longer than those in other markets.
Nokia CEO Rajeev Suri said in April that he's confident China will approve the deal along with the EU and US. The merger is also subject to a national security review in the US.
Nokia announced its plan to buy Alcatel-Lucent in April alongside a strategic review of its Here mapping business, which it is believed to be close to selling to a consortium of German car manufacturers.
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