Nokia is to merge its four existing joint ventures in China in a move that would substantially strengthen the operational efficiency and competitiveness of its China operations. In addition, Nokia also announced its plan to begin production of CDMA handsets.

The new company will be headquartered in Beijing with branch offices in Dongguan and Suzhou, and will continue operations in each of the previous joint venture locations. In addition, parties agree that pending government approval, the new company will begin production of CDMA handsets, using Nokia chipsets. The new company represents one of the largest foreign invested enterprises, as well as the largest manufacturer and exporter in the mobile telecommunications industry in China.

The merger combines Nokia's four existing joint ventures into a single joint venture. The merged joint venture will be converted into a foreign-invested company limited by shares (CLS) subject to approval from relevant government authorities. The shareholders of the CLS will be Nokia, Beijing Capitel Co., Ltd. (Capitel), Dongguan Nan Xin Industrial Development Co., Ltd. (Nan Xin), Shanghai Alliance Investment Ltd. (SAIL), and Beijing Hangxing Machinery Manufacturing Corporation (Hangxing).

Ouyang Zhongmou, CEO and President of Putian Corporation, Nokia's largest China joint venture partner, said the merger is "a logical next step for what has so far been a very fruitful partnership." "We have full confidence in the future development of the new company," he added, "for us, the merger will not only bring increased opportunities for us in China, but also allow us to improve our competitiveness outside of China."

Nokia Mobile Phones President, Matti Alahuhta said: "China already is and will continue to be one of Nokia's major manufacturing centers globally as well as a major center for Nokia's global research and development. The move to begin local manufacturing of CDMA handsets would not only allow us to broaden our product offering to Chinese consumers but also allow the new company to capture opportunities in China's growing CDMA market."

The new company will be one of the largest foreign invested enterprises in China as well as the largest mobile communications manufacturer and exporter in China.