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Monday, June 19, 2006

Nokia And Siemens To Merge Their Mobile Networks

Nokia Corp. and Siemens AG will combine their mobile network operations to create a joint venture with annual revenues of $20 billion, the companies said Monday, a move that will help them compete with market leader Ericsson AB of Sweden.

The 50-50 joint venture, to be called Nokia Siemens Networks, will comprise Nokia's network business group and Siemens' carrier-related operations, creating estimated synergies of $1.9 billion, Nokia said.

Shares of Siemens surged nearly 7.8 percent in Frankfurt trading to $85.64 after the announcement, while Nokia was up nearly 3 percent to $20.38 in Helsinki.

Nokia, based in Espoo, just outside the Finnish capital, sells phones in 130 countries and employs 62,000 people. In 2005, the company's mobile-device sales surged 28 percent to a record 265 million units.

Siemens is Europe's largest electronics and electrical engineering firm, and employs more than 460,000 people. Since Kleinfeld took over as CEO more than a year ago, he has pushed through acquisitions, cut thousands of jobs and sold a cell phone handset business to BenQ of Taiwan in a bid to restore earnings at the company, which makes everything from high-speed trains to lighting for airport runways.

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