Nokia, Siemens Merge Communication Units

Nokia and Siemens said Monday that they would form a joint venture called Nokia Siemens Networks, merging the communications services divisions of both companies. The new entity is expected to immediately become a leader in the industry with strong positions in both the network infrastructure and services businesses.

Current Nokia executive vice president and general manager of Networks Simon Beresford-Wylie would serve as the combined company's CEO. Peter Schonhofer, member of the Siemens AG Austria executive board, would become the chief financial officer.

Operational headquarters would be located in Helsinki, Finland, with a regional headquarters in Munich, Germany. Close of the transaction is expected by the end of the year.


The merger is expected to save the combined companies some 1.5 billion euros annually by 2010. Annual revenues of the combined entities in the 2005 calendar year were 15.8 billion euros.

"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 Klaus Kleinfeld, CEO of Siemens.

While the company is expected to start with some 60,000 employees, layoffs of ten to fifteen percent of that workforce are expected. This would be due to the overlapping job functions within the combined company.

Nokia Siemens Networks will have an extensive portfolio, covering IMS, 2G GSM/EDGE, 3G WCDMA/HSDPA, extensive mobile core, fixed broadband, transport, IPTV, LTE, WiMAX and low-cost mobile voice products for emerging mobile markets.

"I know the power of the Nokia team and have a deep appreciation for the quality and spirit of the people of Siemens," Beresford-Wylie said. "Together, the collective Nokia and Siemens teams will be a powerful force in the industry as we pursue our future goals of providing unequaled customer satisfaction and of becoming the undisputed industry champion."

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