Siemens/Nokia Telecom Equipment Merger Delayed As Corruption Probe WidensSiemens/Nokia Telecom Equipment Merger Delayed As Corruption Probe Widens
Nokia reportedly will independently examine the charges against Siemens AG
December 15, 2006
The ongoing corruption investigation of Siemens AG is spreading in scope and magnitude, as Siemens and Nokia Corp. said they will delay the merger of their telecommunications equipment operations until they get to the bottom of the corruption charges.
Originally scheduled to be consummated in January, the firms announced Thursday that they expect to launch their Nokia Siemens Networks company later in the first quarter, after the planned conclusion of the corruption investigation. According to a published report in Finland's Helsinginsanomat, Nokia will now examine the corruption charges itself. Several former and current Siemens managers have been arrested by German prosecutors on charges of setting up secret and phony bank accounts. Earlier this week, Siemens said the amount of suspicious transactions had nearly doubled, to more than 420 Euros ($556 million), as the dragnet increased. The combined Siemens-Nokia firm would have revenues of about $21 billion, making the combined company the third-largest supplier of equipment to telecom service providers. Alcatel-Lucent of France and Telefon AB LM Ericsson of Sweden are ranked higher in telecom sales. The corruption charges against Siemens have been escalating for six months, after an initial raid by German police on Siemens offices.
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