According to the Financial Times, the Committee on Foreign Investment in the US, which investigates foreign takeovers of US assets for possible security threats, has imposed security requirements on the venture, including procedures that dictate whether foreigners can work on US equipment and software.
The FT said the decision to probe the joint venture indicates a new trend as agencies such as the departments of defence, homeland security and justice, intensify their scrutiny of companies that make components for mobile and fixed-line networks globally.
CFIUS has already imposed tough measures on Alcatel’s merger with Lucent, and the FT said US lawyers have questioned whether CFIUS is going beyond its mandate on foreign takeovers and imposing security requirements on foreign companies while lacking the legal authority to impose them on US companies.
Because the negotiations affect security matters, both Nokia and Siemens declined to comment.
Nokia and Siemens said in December that Nokia Siemens Networks was expected to start operations in the first quarter 2007 instead of this month as previously expected because of a 420m euro ($555m) bribery scandal at the German conglomerate. They said that in light of the investigations of Siemens, which includes the carrier-related business to be transferred to the new company, they intend to adjust their agreements in order to have Siemens conduct an appropriate compliance review prior to closing of the transaction.
