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US to buy into Nokia and Ericsson?

February 10, 2020

US Attorney-General, William Barr, has suggested that the US and its allies should take a “controlling stake” in both Nokia and Ericsson to build stronger alternatives to Huawei.

Barr said the US and its allies should be “actively considering” highly unusual proposals for ‘American ownership of a controlling stake’ in the European vendors, “either directly or through a consortium of private American and allied companies”.

The US has urged other countries to follow its lead and block Huawei equipment from 5G networks due to security and state spying allegations, which Huawei strongly denies.

The Financial Times has previously reported that US officials have been considering offering financial assistance to Nokia and Ericsson to help them compete more on price. Barr goes further: “Putting our large market and financial muscle behind one or both of these firms would make it a far more formidable competitor and eliminate concerns over their staying power. We and our closest allies certainly need to be actively considering this approach.”

Ericsson and Nokia have yet to make any comment on the suggestion. Shares in both companies rose slightly after the remarks.

Last month, a bipartisan group of US Senators introduced a bill to provide more than $1 billion to develop Western-based 5G equipment alternatives to those from Huawei and ZTE.

Categories: 5G, Articles, Business, M&A