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By | Neil McAllister 25th July 2015 08:01

EU rubber-stamps Nokia's proposed Alcatel-Lucent gobble

Says they're 'not close competitors'

The proposed mega-merger between Nokia and Alcatel-Lucent cleared a major hurdle on Friday, with the European Commission having given the deal its blessing.

"The Commission concluded that the transaction would not raise competition concerns, in particular because the parties are not close competitors and since a number of strong global competitors will remain active after the transaction," the regulators wrote in a statement.

The main players that would compete against the combined firm in the European region are Ericsson and Huawei, the Commission observed, with Samsung and ZTE each also taking a small share of the market.

Nokia and Alcatel-Lucent each have something to gain from the merger. For Nokia, it means greater access to North America, where its presence in the telecoms market is currently small. Likewise, Alcatel-Lucent, which does good business in North America, would like to crack the European market.

The Commission added that it doesn't see any reason why the merger should make it harder for smaller players to enter the market.

While Europe has cleared the way for the deal to go forward, however, it still faces scrutiny from other regulators around the globe.

It has already been given the thumbs-up in a few other jurisdictions. US antitrust regulators OK'd the deal in June, as did Brazil and Serbia. In a statement on Friday, Nokia said it has since received further clearances from Albania, Canada, Colombia, and Russia.

China is expected to be the next major obstacle. Business relations have occasionally been rocky between the Middle Kingdom and the West of late, particularly in the telecoms arena.

US lawmakers have urged US businesses to shun equipment from Chinese telecoms giants Huawei and ZTE, saying it could contain secret spyware – even though no evidence of such has ever been found. It's possible that Chinese regulators may raise similar concerns about a combined Nokia/Alcatel-Lucent.

Nokia added that the merger still requires approval by its shareholders. Assuming they give it the thumbs-up, the transaction is expected to complete in the first half of 2016. ®

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