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Nokia's shareholders approve Alcatel-Lucent deal
[HELSINKI] Shareholders in Finnish telecom group Nokia approved the company's acquisition of French-American rival Alcatel-Lucent on Wednesday, paving the way for the creation of a mobile phone networks giant.
They approved the transaction at an extraordinary general meeting in Helsinki without any dissenting voices from the shareholders present.
Shareholders representing 99.5 per cent of Nokia's capital had given their approval in advance.
Once the world's top mobile phone maker, Nokia hopes the merger will help it become the world's number one network equipment and service provider, with a combined revenue of nearly 25 billion euros (S$37.4 billion).
"The shareholders showed their strong support because we got 99.49 per cent of the vote in favour of the proposal," Nokia chief executive Rajeev Suri told AFP.
"While our portfolios are highly complementary, our cultures have many similarities," he said.
Nokia called its shareholders to authorise the deal after it had obtained all necessary regulatory approvals for the deal last month, mainly from the United States, France and China.
"The strategic logic remains as compelling today as on the day when we announced the transaction," said Mr Suri.
The acquisition will allow Nokia to expand from telecoms networks to Internet networks and 'cloud' services to better compete with its global rivals, the Swedish group Ericsson and Huawei of China.
"The combined company would lead in key geographies like North America and China... Our innovation capabilities will be massive, with an annual spending of 4.7 billion euros," Mr Suri said in mid-November.
Analysts view the deal positively.
"In our opinion it makes sense. Of course every transaction has its difficulties and it won't be easy but clearly it will bring the benefits of size," said Equity strategist Kristian Tammela at Nordea Wealth Management.
Nokia hopes to close the deal in the first quarter of 2016.
"By ratifying the transaction in such great numbers, they (shareholders) have endorsed our strongly-held belief that the combined company will be better positioned to compete as a world leader in network technologies over the long-term," said Risto Siilasmaa, chairman of the Nokia board of directors.
This year Nokia has recovered from the financial woes it suffered after failing to adapt to the rapid rise of smartphones, which ended with it selling its unprofitable handset division to Microsoft two years ago.
Some shareholders were nervous ahead of the decision.
Reijo Hakonen travelled 800km to Helsinki to hear what Nokia's board had to say about the deal. Hakonen has owned a small amount of Nokia's shares for many years.
"I am a little unsure about this union between Nokia and Alcatel-Lucent. It can be terribly difficult, two big companies with a different culture in each house. How will they manage to merge them? It isn't simple at all, as we saw with Microsoft. At least it will require a lot of work," he said.
The reformation is not Nokia's first. In its 150 years of existence, the company has redefined itself numerous times before, from a pulp, rubber and cable manufacturer to computers.