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European Commission approves Nokia acquisition of Alcatel-Lucent

Xinhua, July 25, 2015 Adjust font size:

The European Commission on Friday announced that it has approved the proposed acquisition of Alcatel-Lucent by Nokia under the EU Merger Regulation.

Saying both companies are global providers of telecommunications equipment and related services, 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 press release said that the Commission found that, despite the merged entity having combined market shares around or above 30 percent for several specific types of equipment, the overlaps between the two companies' activities are effectively limited.

"Indeed, Nokia has a strong presence in the European Economic Area, where Alcatel-Lucent is a small player, and conversely Alcatel-Lucent has a strong presence in North America, where Nokia's activities are rather limited," it said.

According to the press release, several other strong players are active on the market: Ericsson and Huawei, which together with Nokia are the main players in Europe, along with the Chinese ZTE and the Republic of Korea's Samsung.

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. 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).

"Finally, the Commission's investigation did not find that the transaction would make it harder for new or small players to enter and expand in the market," it said.

The Commission also looked into the possibility of the transaction leading to the markets concerned being more susceptible to coordination between the remaining players.

However, it concluded that the transaction would not significantly change the market structure to make coordination easier, in particular given the importance of technological innovation and a lack of transparency in the markets concerned.

The transaction was notified to the Commission on June 19 this year, said the press release. Endit