Finland is building its Nokia stake in response to US interest: Report

The Finnish state is buying shares of Nokia Oyj to send a signal that it’s ready to protect the maker of 5G mobile networks amid a geopolitical battle in which the US has expressed interest in owning a part of the company.

The state’s equity-asset manager Solidium Oy recently crossed the 5% threshold in Nokia shares, and now has about 1 billion euros ($1.2 billion) worth of stock. The telecommunications-equipment maker was earlier this year reported to have hired advisers to consider strategic alternatives and US Attorney General William Barr has suggested his government should buy a stake in Nokia or its rival Ericsson AB.

Solidium’s stock purchases “act as a counter balance” to Barr, and “show William Barr and his European colleagues that the situation is under control,” Chief Executive Officer Antti Makinen said. “There’s a domestic anchor owner who can safeguard continuity, at least to some extent.”

Nokia, Sweden’s Ericsson and China’s Huawei Technologies Co. are locked in intense competition to supply 5G technology that’s increasingly been caught up in a global political battle. US interest on Nokia and Ericsson centers on countering the threat posed by China’s dominance of 5G, where it has no domestic supplier. Other governments, including the U.K., have also banned Huawei from supplying 5G networks.

“From a European perspective, it’s important that Europe has 5G technology. But Europe isn’t an entity who could buy shares,” Makinen said. “For the Finnish state, it boils down to this: it’s one of the most — if not the most — important company in Finland and keeping it Finnish has value to us.”

Solidium won’t disclose plans of further purchases, and Makinen said the 5% it now has “feels like a suitable amount.”

The bet on Nokia comes with “plenty of risks,” both technological and trade-policy related, he said. “This isn’t a risk-free investment by any means.” The Indian Telegraph