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Nokia-Siemens Merger Approved

by Ulrika Lomas, for, Brussels

15 November 2006

The European Commission announced on Monday that it has cleared under the EU Merger Regulation the proposed merger between the Finnish company Nokia and the network equipment business of the German company Siemens AG.

The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Nokia is mainly active in mobile telecommunications, i.e. handsets and equipment to run mobile telephony networks. Siemens has activities in the telecommunications sector and is active in a number of other business areas such as automation and control, power and transportation.

Both Nokia and Siemens supply telecommunications equipment and related services to operators of communications networks worldwide. Via the proposed concentration Nokia would acquire control of the newly created company Nokia Siemens Networks, to which Nokia and Siemens would contribute their mobile and fixed-line telecommunications network equipment business.

According to the EC:

"The main competitive impact of the proposed transaction would be in the mobile network equipment sector, since Nokia has few activities in fixed-line telecommunications."

"The Commission’s market investigation revealed that, despite the considerable market shares the merged entity would have in the mobile network equipment sector, the market structure would remain competitive. A sufficient number of credible competitors would remain in the market, inter alia market leader Ericsson and Alcatel-Lucent. Customers (mostly network operators) would still have alternative suppliers."

"The Commission’s investigation furthermore showed that the proposed merger would not give rise to competition concerns with respect to the other activities of the parties, namely fixed-line telecommunications network equipment and associated mobile and fixed-line services."

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