asbCompensation to be negotiated. SASAC, the State Holding Company, will have 50% - 1 share in the combined Nokia China and Alcatel Shanghai Bell. Yuan Xin will continue as chairman and party secretary. No word yet on whether Luis Martinez-Amago will continue as second in command. Nokia, the European survivor, will have 50% +1 but is unlikely ever to challenge Chinese control. Chinese sales are absolutely crucial to Alcatel and Nokia. They had no real negotiating room and had to take whatever the Chinese offered.

As part of the EU/China deal for a telecom equipment cartel, Alcatel Shanghai Bell and Nokia each have a share of the Chinese market, crucial sales for the struggling companies. In an interview with Jessica Lipsky of EE Times, Alcatel CTO Marcus Weldon notes, "China allows foreign vendors to claim a maximum 11% of the wireless market; Alcatel-Lucent and Nokia each have an 11% share." Whether China will allow the merged company 22% or only 11% is a major factor in the future success of the company, but nothing is decided.

Lipsky quotes Weldon, "I think what is definitely true is we will both be stronger in wireless in either company. We’re hopeful that means we can maintain the aggregate market share and not have that renormalized.” 

I'm glad to find a figure on ownership percent, which Alcatel for a decade has been refusing to disclose.

Here's the pr. 

China Huaxin and Nokia sign memorandum of understanding to create new joint venture combining Alcatel-Lucent Shanghai Bell and Nokia China

Source?China Huaxin Date?28.08.2015 Hits?125
Beijing, China –China Huaxin Post & Telecommunication Economy Development Center ("China Huaxin") and Nokia have signed a memorandum of understanding ("MoU") today confirming their intention to combine Alcatel-Lucent Shanghai Bell ("ASB") and Nokia's telecommunications infrastructure businesses in China ("Nokia China") into a new joint venture. As agreed under the MoU, Nokia expects to hold 50% plus one share in the new joint venture, with China Huaxin holding the remaining shares. Fair value compensation would be received for the contribution of relevant assets to the joint venture.

The new joint venture is conditional on and would be formed after the closing of Nokia's planned combination with Alcatel-Lucent. The new joint venture would be registered in the China (Shanghai) Pilot Free Trade Zone and have one board of directors, one management team, unified customer and business functions, and one integrated product portfolio and R&D platform. It is expected to be a strong national asset based in China capable of delivering value for both parties.

Rajeev Suri, President and CEO of Nokia Corporation, said: "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. We look forward to joining with China Huaxin and ASB to drive innovation for customers in China and to help accelerate the country's shift to an innovation-driven economy. 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."

Yuan Xin, Chairman, China Huaxin, said: "We are pleased to have signed this agreement with Nokia, and firmly believe the proposed combination would reinforce our companies' presence in China. By bringing these two entities together, the new company would possess greater capacity for innovation and outstanding R&D capabilities, delivering benefits to our customers and shareholders alike."

Until the closing of the proposed combination between Nokia and Alcatel-Lucent, Nokia China and ASB will continue to operate as two independent companies.

  Ma Rui Zhi (Luis Martinez-Amago)

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