Finnish telecommunications company, Nokia, is set to exit its joint venture with Chinese Huawei amid the escalating US-China tensions. Nokia had initially proposed a deal last year, but it was met with strong protests from Huawei, causing the agreement to fall through. In the latest development, Nokia has found new buyers for its 51 percent majority stake in the joint venture called TD Tech.
Under the new agreement, the wireless technology firm will be jointly controlled by Huawei and a consortium including the government-owned Chengdu High-Tech Investment Group, Chengdu Gaoxin Jicui Technology Co, and venture capital firm Huagai. The State Administration for Market Regulation (SAMR) disclosed the deal, without specifying the equity distribution among the new participants.
The regulators have expressed no antitrust concerns regarding the deal and will seek public feedback until January 28, 2024. Huawei and TD Tech collectively control less than 10 percent of China’s smartphone market.
Originally a joined venture between Huawei and Siemens
TD Tech, established in 2005, was initially a joint venture between Huawei and Siemens until 2007 when Siemens sold half of its stakes to Nokia. Siemens completely divested its shares in 2013, making Nokia the major shareholder. Huawei has been the de facto controller, despite Nokia’s majority ownership.
A previous attempt by Nokia to sell its stake to a Shanghai-listed company was prevented by Huawei’s threat to stop licensing technology to TD Tech.
TD Tech has faced challenges due to US sanctions that restrict the sale of advanced chips made with US-origin technology to Huawei. Despite these restrictions, TD Tech ventured into selling rebranded Huawei phones under its own brand in 2021.
Washington’s sanctions aim to prevent companies from supplying Huawei with advanced chips. The evolving situation underscores the dynamics and strategic maneuvers within the global telecommunications landscape amid geopolitical tensions.
Source: finance.yahoo.com
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