Nokia and Siemens have announced that they intend to merge the Networks Business Group of Nokia and the carrier operations of Siemens into a new company, to be called Nokia Siemens Networks. The 50-50 joint venture will cooperate on fixed and mobile network infrastructure and services.
“We believe the partnership with Siemens is the most effective way to build the scale and broad product portfolio necessary to compete globally and create value for shareholders,” said Olli-Pekka Kallasvuo, CEO of Nokia, who will serve as chairman of Nokia Siemens Networks
Based on the 2005 calendar year, the combined company has predicted sales of €15.8 billion a year and is expected to start operations with 60,000 employees, making it one of the world’s largest network businesses.
The merger will result in estimated savings of €1.5 billion annually by 2010. Cost-cutting measures include a 10-15 per cent reduction in headcount over the next four years, subject to consultation with employee representatives.
Nokia Siemens Networks will have its operational headquarters in Helsinki, Finland, and have regional headquarters in Munich, Germany, where three of the future five divisions of the new company will be based.
Simon Beresford-Wylie, currently Executive Vice President and General Manager of Networks at Nokia, will assume the position of chief executive officer immediately upon the closing of the merger.
The merger is expected to complete before January 1, 2007 and is subject to customary regulatory approvals.