Nokia, Siemens merging phone equipment units

Big news in the wireless industry: the Wall Street Journal is reporting that Nokia, the world's number one handset manufacturer, is planning on merging its phone equipment unit with that of Germany's Siemens AG to create a company worth an estimated $31.5 billion. Even though both parties will have equal ownership on paper, it is clear that Nokia will exert more influence on the new entity, as it will be based in Finland, led by Nokia executive Simon Beresford-Wylie, and have a board controlled by Nokia-picked members. Besides the $1.58 billion in annual savings that both companies will realize in eliminating duplicate R&D operations, the real benefit of the merger will be the stronger market position held by the combined units in the face of growing competition from Asian manufacturers. According to the Journal (subscription required, as usual), the two companies will formally announce their plans tomorrow.

[Thanks, John]