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Brussels clears Nokia's Alcatel-Lucent acquisition

The European Commission has approved Nokia’s planned purchase of Alcatel-Lucent under the EU Merger Regulations

The European Commission (EC) has given Nokia the go ahead to acquire Alcatel-Lucent under the European Union (EU) Merger Regulations after deciding the transaction raised no concerns over competition.

The commission decided the two companies were not close enough competitors, and because a fair number of strong global competitors would remain active in the market following the transaction, there was no cause for concern.

The EC said it assessed the effects of the transaction on competition in a number of areas, including radio access network hardware for connecting mobile devices to networks, and core network systems for routing voice and data traffic.

Both companies have market shares of about 30% worldwide for a number of specific types of equipment, but there was little overlap between their activities, it said. In particular, Nokia was stronger in the European Economic Area, whereas despite its French headquarters, Alcatel-Lucent’s extensive US heritage made it a bigger player in North America.

“Moreover,” said the EC, “several other strong players are active on the market: Ericsson and Huawei, which together with Nokia are the main players in Europe, along with the Chinese ZTE and the Korean Samsung.”

It said while ZTE and Samsung had relatively small market shares comparatively speaking, their presence did not fully reflect the competitive importance of their offerings, hence their inclusion.

Samsung in particular is expected to play a “more significant role” in next-generation mobile telecoms equipment, particularly when 5G networks begin to go live around the early 2020s.

The EC also looked into the possibility of the acquisition leading to the markets being more vulnerable to co-ordination between the remaining players, but found that it would not significantly change the market structure to make this easier “in particular given the importance of technological innovation and a lack of transparency in the markets concerned”.

Separately, Nokia revealed that its planned acquisition has been green-lighted by competition watchdogs in Canada, Russia and Albania. The expiration of the anti-trust review period in the US means the deal has also been approved there.

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