Here's why the European Commission approved €15bn Nokia & Alcatel-Lucent merger

European Commission cites "strong global competitors" preventing monopoly

Mergers and acquisitions

Nokia's 15.6 billion acquisition ofFrance's Alcatel-Lucent has received the EU's blessing, paving the way for the merger to go ahead.

The European Commission began investigating the deal following its proposal in April this yearin order to ensure that it is not in breach of anti-monopoly statutes, and has now determined it does not violate EU laws preventing anti-competitive behaviour.

The Commission's reasoning behind its decision was "because the parties are not close competitors, and since a number of strong global competitors will remain active after the transaction".

Key rivals such as Ericsson and Huawei are challenging the combined market dominance of Nokia and Alcatel-Lucent, according to the Commission.

"In particular, Samsung is expected to play a more significant role in the near future in relation to the newest generation mobile telecommunications equipment", its statement read.

There is also little overlap in the regions that each company is most dominant in, according to the Commission, with Nokia maintaining a strong European presence while Alcatel-Lucent remains a big player in North America.

This purchase marks the latest stage in Nokia's transition to a new business model, following the sale of its well-known mobile division to Microsoft last year.

It is also set to shed its mapping service, HERE, to a trio of German car manufacturers including BMW and Audi.

The company is now aiming to return to its roots as a provider of network equipment and infrastructure systems.

In a joint statement following the merger's announcement, the firms said "the combined company will be in a position to accelerate development of future technologies", citing 5G and the Internet of Things as particular focuses.

A Nokia statement released on Friday read: "The transactionremainssubject to approval by Nokiashareholders, Nokia holding over 50.00% of the share capital of Alcatel-Lucent on a fully diluted basis upon completion of the public exchange offer, receipt of other regulatory approvals and other customaryconditions."

If approved, it should go through in the first half of 2016, Nokia added.

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