Nokia and China Huaxin Post and Telecommunication Economy Development Center signed a memorandum of understanding to integrate Nokia's telecom infrastructure businesses in China with Alcatel-Lucent Shanghai Bell to establish a joint venture.

According to the MOU, Nokia will hold 50% plus one share in the new JV; while China Huaxin will hold the remaining minority shares.

The founding of the new JV will start after the completion of Nokia's global acquisition of Alcatel-Lucent. The new joint venture would be registered in China (Shanghai) Pilot Free Trade Zone with the name of Nokia Shanghai Bell. It is expected to become a strong asset based in China capable of delivering great value for both parties.

Rajeev Suri, president and CEO of Nokia, said that the MOU demonstrates Nokia's deep commitment to China. Together with China Huaxin, Nokia will be in an excellent position to support strategic initiatives of the Chinese government such as "Internet Plus" and provide a strong link between Europe and China. They look forward to joining with China Huaxin and Alcatel-Lucent Shanghai Bell to drive innovation for customers in China and to help accelerate the country's shift to an innovation-driven economy.

Yuan Xin, general manager of China Huaxin and chairman of Alcatel-Lucent Shanghai Bell, said that they are pleased to have signed this agreement with Nokia, and firmly believe the proposed combination would reinforce their companies' presence in China. By bringing these two entities together, the new company would possess greater capacity for innovation and outstanding R&D capabilities, delivering benefits to their customers and shareholders.

Nokia's global acquisition of Alcatel-Lucent is expected to close in the first half of 2016. Until then, Nokia China and Alcatel-Lucent Shanghai Bell will continue to operate as two independent companies.

Other financial terms of the JV, including capitalization targets, were not made available.