On Friday, the European Commission gave Finnish company Nokia the green light to buy its rival, the Franco-American group Alcatel-Lucent. They decided the merger would not create any competition issues within the telecommunications sector. “Both companies sell telecommunications equipment and services all over the world. They are not direct competitors, and other powerful global competitors will continue their activities after this transaction”, the Commission said in a press release.
Among them are Ericsson and Huawei, the Chinese company ZTE and the Korean group Samsung, who “should play a more important role in developing the latest mobile telecommunications equipment (4G, which is being sold now, and 5G) in the very near future”, says the European competition police.
Nokia’s offer places Alcatel-Lucent’s value at 15.6 million euros. The Finnish company will hold 66.5% of the capital belonging to the new company it will form with the Franco-American supplier in early 2016.
The Commission looked at the transaction’s possible effects on the mobile network equipment sector, especially connecting mobile phones to networks and routing telephone calls and data traffic. After investigating, it decided that “the two company’s activities hardly overlap”.
Nokia is very present in Europe, where Alcatel is only a minor player. However, Alctael-Lucent is very present in North America, where Nokia is less so.