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EU clears Alcatel deal with Flextronics

Jul 02, 2001

BRUSSELS, July 2 (Reuters) - The European Commission said on Monday it had approved Alcatel's plans to outsource its European GSM mobile handset production to Singapore-based electronics contract manufacturer Flextronics.

The Commission said there was a number of very strong competitors in the market for electronic equipment services to original equipment manufacterers.

"This ensures significant competition on the relevant market and precludes any possibility that Flextronics could acquire a dominant position," it said in a statement.

Alcatel, like other handset firms, is being hit by a downturn in the European handset industry. Alcatel has announced plans to transfer its Laval GSM plant and its 830 staff to Flextronics.

Flextronics, based in Sweden, reached a similar agreement earlier this year with Swedish handset giant Ericsson.

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