Nokia/Siemens (European Commission, phase I)
Advisory Services
The Situation
On 19 June 2006, Nokia and Siemens announced plans to merge their mobile and fixed-line telecommunications network equipment businesses. This transaction was notified to the European Commission on 5 October 2006.
NERA's Role
NERA advised Nokia and Siemens throughout the merger control process. The economic analysis focused particularly on the closeness of competition between the merging parties, which NERA investigated on the basis of a bidding study and extensive win/loss data.
The Result
While some respondents to the market investigation voiced fears that, post-merger, various EEA mobile phone operators would be left with only two viable competitors (i.e., Ericsson and Nokia/Siemens), and in some instances with the merged entity as the single vendor, on 13 November 2006 the European Commission issued an unconditional clearance decision.
In relation to non-coordinated effects the Commission found that, despite the merged entity's considerable market shares in the mobile network equipment sector, customers could turn to a sufficient number of credible alternatives, inter alia market leader Ericsson and Alcatel-Lucent. It also concluded that the parties' customer overlaps were limited, and that the examination of win/loss data and similar information indicated that Nokia and Siemens were not each other's closest competitor.
The Commission also analyzed coordinated effects, potential concerns over product discontinuation, Nokia's influence over technology standardization processes, complaints about bundling of infrastructure and handset products, and concerns over leveraging Nokia's position in network equipment in the downstream handset market.
Following the Commission's unconditional approval, the parties' combined telecommunications network equipment business started its operations on 1 April 2007, under the name of Nokia Siemens Networks.
