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Finland invests $1 billion in Nokia to boost national influence

Reuters  |  HELSINKI 

By Rosendahl

HELSINKI (Reuters) - investment arm has spent about 844 million euros ($1.04 billion) on building a 3.3 percent stake in to strengthen national influence over the

ruled the global mobile phone market a decade ago and the collapse of that business was a major cause of a decade of economic stagnation from which is only just recovering.

Nokia, which employs 6,300 people in in a global workforce of around 102,800, is now focused on the telecom network industry where it competes with Sweden's and China's

"We believe that this will be a good investment. One must remember that is Finland's largest company and its Finnish ownership has been rather thin," told

Solidium, the government investment arm, built the stake by buying shares on the market over the early months of 2018.

It trimmed its stake in Swedish telecoms company Telia, firm and holding company in the past weeks to finance the investment in Nokia.

Makinen said would not seek a seat on Nokia's board at a shareholder meeting scheduled for May but that was an option it could look at in the future.

He noted that over time was looking to have board members in each of its companies. Makinen himself is proposed as a new of and pulp and packaging group this spring.

Asked if Solidium was looking to increase its stake in Nokia, he said that he was happy with the current stake and would not speculate on future investments.

Most of Solidium's stakes are to the tune of over 10 percent in a company's outstanding shares. The Nokia investment accounts for around 11 percent of its total equity stakes.

According to Nokia's webpage, three Finnish pension funds at this point own less than 3 percent of Nokia.

BRIGHTER OUTLOOK

Nokia shares were flat at 1010 GMT. The company declined to comment on the

"For a long-time investor like Solidium, this is a good time to enter Nokia… The market outlook is brightening and the stock's valuation is low. And this a significant company for Finland," said Mikael Rautanen, at Equity Research, with a "Buy" rating on the stock.

Nokia said last month that major were accelerating their timelines for adopting next-generation 5G networks, boosting the company's confidence in an uplift for its business later this year.

"The appealing factors for us are the company's strong market position combined with broad technological expertise," Makinen said.

Solidium was founded a decade ago as a bid to distance politicians from the state's holdings. It manages minority holdings in 13 listed Finnish companies which mainly originate from an era of state-led industrialisation.

Its mandate is to keep significant Finnish companies "more or less Finnish", Makinen told in an interview last month, adding that the priority was to help the companies to succeed and not for example to protect Finnish jobs.

Nokia and Microsoft, which bought the Finnish company's phone business in 2014, have slashed thousands of jobs in the country in the past decade. Disagreements over how Solidium should be run led to dismissal of its former chairman, and prompted a strategic reform last year, including the drive to take up board seats.

($1 = 0.8112 euros)

(Reporting by Rosendahl; Editing by Terje Solsvik/Keith Weir)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 16:07 IST
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