Nokia strikes China joint venture for 'swift approval' of Alcatel-Lucent merger

Nokia hopes to win the approval of China's regulators with a new joint venture with Chinese investment firm Huaxin.

Ahead of China's regulators making a decision on Nokia's merger with Alcatel-Lucent, the Finnish company has agreed to a joint venture with Chinese investment firm China Huaxin.

Under a memorandum of understanding between the pair, Nokia will hold 50 percent plus one share of a joint venture that combines Nokia's infrastructure businesses in China and Alcatel-Lucent Shanghai Bell.

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Nokia and Huaxin intend to use the proposed joint venture to speed up regulatory approval in China.

"With this MoU now in place, we will also work closely with our new partners to make the case for swift approval of the proposed combination between Nokia and Alcatel-Lucent by the appropriate Chinese authorities," said Nokia chief and president Rajeev Suri.

Europe, the US and several other national regulators have already approved the proposed €15.6bn merger, leaving China as one of the main hurdles to the union.

Once the deal is finalised, the merged companies will become the world's second largest network equipment vendor behind Sweden's Ericsson and ahead of China's Huawei.

The joint venture with China Huaxin -- or Huaxin Post & Telecommunication Economy Development Center -- is conditional on Nokia closing its merger with Alcatel, said Nokia.

China Huaxin last year acquired Alcatel-Lucent's enterprise business for €202m, though Alcatel retained a small stake in the firm.

"Today's agreement demonstrates Nokia's deep commitment to China. Together with China Huaxin, Nokia will be in an excellent position to support strategic initiatives of the Chinese government such as "Internet Plus" and provide a strong link between Europe and China," said Suri.

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