Nokia finally exits Huawei China JV

Huawei has led a group of Chinese partners in buying out Nokia's stake in TD Tech, ending a nine-month standoff over the enterprise wireless vendor.

China's State Administration for Market Regulation announced Friday that Huawei and three other companies had acquired Nokia's majority stake in TD Tech.

Nokia had struck a deal to sell off its investment to New East New Materials, a hi-tech ink-maker, last April – but Huawei publicly announced it would refuse to work with the new partner.

"Our company does not have any willingness or possibility to jointly operate TD Tech with New East New Materials," it declared. Huawei said the JV had been based on the strategic cooperation and technical strengths of the two partners and "the purchaser must have the same strategic capabilities."

The would-be buyer terminated the transaction on December 19. 

New East had offered 2.1 billion Chinese yuan (US$291 million), but it is not known how much the Huawei-led group is paying for the Nokia stake. Huawei declined to comment.

TD Tech was formed in a different telecom universe way back in 2005, when Nokia was the world's biggest mobile phone company and Huawei was barely known outside China. Nokia took a 51% stake and Huawei the remaining 49%.

Huawei technology

These days TD Tech works closely with Huawei to offer enterprise networks, IoT solutions, CPE and customized handsets, mostly based on Huawei technology. Its website lists verticals including ports, video streaming, coal mines and utilities. It says it has more than 2,000 employees, of whom 71% are R&D staff, and last year spent RMB10 billion ($1.4 billion) on research.

According to New East's filings last April, TD Tech had reported revenue of $5.2 billion Hong Kong dollars (US$665 million) and HK$8.6 billion ($1.1 billion) in 2021 and 2022, with earnings of HK$53 million ($6.78 million) and HK$157 million ($20.1 million) respectively.

Two of Huawei's new partners, Chengdu Hi-Tech and Chengdu Hi-tech Jicui, are owned by the Chengdu High-Tech Industrial Development Zone, which houses one of TD Tech's three China research centers.

The other investor is Beijing-based investment firm Huagai Venture Capital Management.