U.S. Attorney General recommends U.S. acquisition of Nokia and Ericsson to fight Huawei

In terms of 5G network construction, Huawei has won a lot of favors due to its advantages in quality and low price. However, the United States rejected Huawei and asked that its allies also refuse Huawei to participate 5G network.

Some US allies have banned Huawei under lobbying or pressure from the United States, but countries such as Britain have not followed the United States and allowed Huawei to participate in the 5G network construction.

However, this kind of lobbying or pressure does not solve the real problem, building a network requires a lot of investment, so Huawei’s quality and cheap prices make many operators unable to refuse.

If Huawei is rejected for so-called security issues or political purposes, it may increase the cost of network construction significantly.

“Nokia” by Open Grid Scheduler / Grid Engine is licensed under CC0 1.0

In response to these issues, the US Attorney General William Barr issued a proposal recently that the United States and its allies should acquire controlling stakes in Finland’s Nokia and Sweden’s Ericsson.

Ericsson and Nokia are both very powerful companies in the communications industry. The control of Ericsson and Nokia helps the United States and its allies fight against Huawei.

William Barr also acknowledged that the measure could bring potential monopoly issues to Ericsson and Nokia’s competitiveness, but William Barr thinks it is also worth it.

In terms of specific operation methods, William Barr believes that the United States and its allies can be considered for joint acquisition, or that US private companies or a consortium can jointly complete the acquisition.

At present, Ericsson and Nokia have a combined market value of about $ 50 billion. Although the Nokia CEO said that the company is still recovering, it has not affected the share price.

Shares of Ericsson and Nokia have skyrocketed after William Barr released the news, but the news is only a proposal and not a consideration by the US government.

Of course, the acquisition or holding of Ericsson and Nokia at the same time must also be approved by the US antitrust agencies, and also approved by other regional regulatory authorities.

Neither Finnish Nokia nor Swedish Ericsson have commented on the matter, but neither company nor their country is likely to be willing to be acquired.

Via: CNBC