Nokia and industrial investment company China Huaxin Post & Telecommunication Economy Development Center have signed a final agreement covering the integration of Alcatel-Lucent Shanghai Bell with Nokia's China business to create a new joint venture Nokia Shanghai Bell.
The new joint venture will become Nokia's exclusive platform in China for the development of advanced new networking technologies.
Nokia will own 50% plus one share of the joint venture, with China Huaxin owning the remainder.
Nokia said Alcatel-Lucent Shanghai Bell and Nokia's China business have been effectively operating as a single entity since January 2016 when an interim deal for the joint venture was reached.
The new agreement will formalize this arrangement, and is expected to be fully executed in July, pending approvals.
Nokia Shanghai Bell will have an R&D team of around 10,000 researchers working across six R&D sites in China. The researchers will conduct activities related to Nokia's core networking focus, such as 5G, IP routing, optical and fixed line networks, as well as the IoT and cloud computing.
"Today's agreement is historic for Nokia and for China, marking the next step of our decades-long commitment to the country and underscoring China's leading role in developing next-generation communication technologies,” Nokia CEO Rajeev Suri said.
“Nokia Shanghai Bell will enhance our ability to innovate, helping us strengthen ties with communication service providers and expand to new, fast-growing sectors in need of high-performing networks.”
Nokia purchased Alcatel-Lucent in January last year in a $17 billion all-stock deal, but China Huaxin acquired Alcatel-Lucent's enterprise business for around $227 million. Plans for the Chinese joint venture were first made while the Nokia/Alcatel-Lucent merger was still awaiting regulatory approval.