Nokia, Siemens Reported in Deal

Nokia Corp. of Finland and Siemens of Germany have reportedly agreed to combine their telephone equipment units in a deal valued at about $31.6 billion.

Nokia would control a majority of board seats of the new company, which would be based in Finland and not trade separately, the Wall Street Journal reported Sunday on its website, citing people familiar with the deal.

Ownership of the new company would be split evenly between Nokia and Siemens, and the firm would be headed by a Nokia executive, Simon Beresford-Wylie, according to the report.

The deal is expected to be announced today, the report said.

The combination would allow both companies to reduce redundant research-and-development spending, with savings as high as $1.58 billion annually, according to the report.

Siemens, based in Munich, Germany, is not expected to leave the telecommunications business but would play a smaller role than Nokia in the new operation, the report said.

U.S.-based representatives of Nokia and Siemens could not be reached for comment Sunday.

Analysts and news reports have linked Nokia, based in Espoo, Finland, to Siemens’ communications business or parts of it for several months.

According to the Journal report, the deal would include all of Siemens’ telecommunications equipment unit.

Germany’s Manager magazine reported in February that Siemens had been in talks to sell its telecom equipment unit to Nokia or form a joint venture but said that talks failed, because Nokia was interested only in Siemens’ profitable mobile network equipment arm and not the money-losing fixed-line network business.

Nokia’s management has said repeatedly that it intended to make more acquisitions and that it planned to be a buyer in the ongoing consolidation in the infrastructure sector.