Close
  • Latest News
  • Artificial Intelligence
  • Video
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Artificial Intelligence
  • Video
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Latest News
    • Networking

    Nokia Move in China May Help Push Alcatel-Lucent Acquisition

    Written by

    Jeff Burt
    Published September 1, 2015
    Share
    Facebook
    Twitter
    Linkedin

      eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.

      Nokia’s Networks’ $16.6 billion takeover of Alcatel-Lucent is pushing forward, though not without a bit of controversy.

      The deal, designed to take two networking vendors that are in transition and create a formidable company that can compete with the likes of Ericsson, Cisco Systems and Huawei Technologies, already has received approval from regulators in the United States and Europe, among other places.

      Now, in an effort to curry the favor of Chinese officials, Nokia officials have entered into a joint venture with Chinese investment firm China Huaxin to create what will be called Nokia Shanghai Bell. Nokia will hold a 50 percent-plus-one share of the joint venture, which will bring together Nokia’s telecommunications infrastructure business in China with Alcatel-Lucent Shanghai Bell, an existing joint venture between Alcatel-Lucent and China Huaxin.

      According to a memorandum of understanding (MoU) between Nokia and China Huaxin, the new joint venture will be a boon for both the Chinese telco market and both companies. It also puts the Finland-based Nokia in a strong position to support initiatives under way by the Chinese government—called “Internet Plus”—to drive economic growth by integrating Internet technologies with manufacturing and business efforts, and to help establish stronger links between China and Europe, according to President and CEO Rajeev Suri.

      In addition, Suri expects it will ease the approval process for Nokia’s acquisition of Alcatel-Lucent.

      “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,” he said in a statement.

      The acquisition, announced earlier this year after more than two years of on-again, off-again negotiations, will create the world’s second-largest network equipment vendor, behind Ericsson. In 2014, the companies combined generated $27.5 billion in sales and $2.45 billion in profits, more than $5 billion in R&D (including money for Alcatel-Lucent’s and Nokia’s FutureWorks program) and net cash of almost $7.9 billion.

      Both vendors have had their share of changes over the past few years, with Nokia ending its networking partnership with Siemens and Alcatel-Lucent going through another of several restructurings since the merger of Alcatel and Lucent in 2006, this one called the Shift Plan.

      Since the deal was announced, it was understood that Suri will assume the CEO position of the merged company, with Alcatel-Lucent CEO Michel Combes exiting the business. In August, it was learned that Combes, who engineered the Shift Plan in hopes of streamlining the business and reducing costs, will become chairman of French telco Numericable-SFR and chief operating officer at Altice, an investment arm of billionaire Patrick Drahi and the controlling organization of Numericable-SFR.

      However, as part of the buyout, Combes will receive $15.7 million over three years, a figure that reportedly has drawn the ire of both the French government and workers unions. Combes reportedly has refused to give up the bonuses, which he said were not tied to the Nokia deal but instead were paid to him because of how well he did his job as Alcatel-Lucent’s top executive.

      Combes, who leaves Alcatel-Lucent for his new jobs Sept. 1, told French news organizations that under his watch, Alcatel-Lucent was able to avoid bankruptcy and its share price increased.

      However, French politicians and union leaders noted the high unemployment in France—hovering around 10 percent—and stagnant economy; they said that Combes’ bonuses look particularly poor given that backdrop. In addition, his Shift Plan, while reviving Alcatel-Lucent’s fortunes, also led to job losses for about 10,000 employees.

      “In today’s world and with the problems people face one needs to have a bit of common sense, proportion and restraint,” French Finance Minister Michel Sapin reportedly said on France Info radio Aug. 31. “And in this case Michel Combes hasn’t. [He must] try to understand how this looks to others, to the French, and from there take good decisions. He still has time to do so.”

      Herve Lassale, an official with CFDT, the largest union at Alcatel-Lucent, told French journalists that “employees who saw the amounts announced at the weekend were no doubt sick. They are indecent considering the social problems of recent years.”

      Editor’s note: This story has been changed to note that Nokia is based in Finland.

      Jeff Burt
      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

      Get the Free Newsletter!

      Subscribe to Daily Tech Insider for top news, trends & analysis

      Get the Free Newsletter!

      Subscribe to Daily Tech Insider for top news, trends & analysis

      MOST POPULAR ARTICLES

      Artificial Intelligence

      9 Best AI 3D Generators You Need...

      Sam Rinko - June 25, 2024 0
      AI 3D Generators are powerful tools for many different industries. Discover the best AI 3D Generators, and learn which is best for your specific use case.
      Read more
      Cloud

      RingCentral Expands Its Collaboration Platform

      Zeus Kerravala - November 22, 2023 0
      RingCentral adds AI-enabled contact center and hybrid event products to its suite of collaboration services.
      Read more
      Artificial Intelligence

      8 Best AI Data Analytics Software &...

      Aminu Abdullahi - January 18, 2024 0
      Learn the top AI data analytics software to use. Compare AI data analytics solutions & features to make the best choice for your business.
      Read more
      Latest News

      Zeus Kerravala on Networking: Multicloud, 5G, and...

      James Maguire - December 16, 2022 0
      I spoke with Zeus Kerravala, industry analyst at ZK Research, about the rapid changes in enterprise networking, as tech advances and digital transformation prompt...
      Read more
      Video

      Datadog President Amit Agarwal on Trends in...

      James Maguire - November 11, 2022 0
      I spoke with Amit Agarwal, President of Datadog, about infrastructure observability, from current trends to key challenges to the future of this rapidly growing...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2024 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×