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Nokia, Siemens Tied Until 2013. Really now?

Siemens might be looking to get out from the deal sooner than expected

By Elena Balan, Communications News Editor

8th of October 2007, 11:59 GMT

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Nokia and Siemens currently work together under a joint name as a result of a six year agreement that they have closed. The new Siemens chief executive has decided to get rid of non-core ventures and speculations also see this company bailing

out of the venture before the end of the term.

Nokia or Siemens can decide on getting out of the joint venture before the end of the six years. The condition for this to happen is that they both agree to do so and settle on the terms of the parting. Still, Nokia Chief Financial Officer Rick Simonson had said on a conference call in August 2007 the companies are in a six year deal, without revealing any further details. This should mean that they plan on staying in it to the end of this period.

Nokia is pretty sure on its plans for the venture. Still, Siemens might be the one walking away from the 25 billion euro venture. As a result, Nokia should be forced into finding another partner, although it might be a less appealing alternative. Moreover, the leading handset producer should also spend up to 10 billion euros (about USD 14 billion) to purchase Siemens' stake and hold complete control over the entire deal. Rumors on the high possibility of these two companies ending their partnership have been going by for some time.

Both Nokia and Siemens made no comments on the suppositions circulating over the past period. They agreed in June 2006 to start a venture, each with half of the shares and already have won themselves an important part of the market. Because of this, it would be surprising to see them in the situation of leaving aside the customers they have made and their profits and breaking up so sudden.

TAGS:

Nokia | Siemens | venture | partnership

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