Nokia Gives Half of Nokia China to Government to get Alcatel Deal Approved
Compensation 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.