Benzinga | May 12, 2021 08:41AM EDT

Nokia Will Receive $97M From Ericsson For 2019 Claim Settlement

* Telefonaktiebolaget L M Ericsson (NASDAQ: ERIC) has reached a settlement agreement with Nokia Oyj (NYSE: NOK) on a 2019 U.S. DOJ and SEC investigation into Ericsson's violations of the U.S. Foreign Corrupt Practices Act (FCPA).

* The investigations were related to criminal charges of books, records, and internal controls violations of the FCPA and bribery.

* Ericsson will pay a penalty of $97 million ((euro)80 million) for uncertainty, risk, and expense from the prolonged and complex litigation.

* The settlement will affect Ericsson's Q2 2021 EBIT and cash flow by (euro)80 million and (euro)26 million, respectively.

* The remainder of the settlement amount will be made in similar installments in 2022 and 2023, impacting the cash flow.

* The settlement amount will be recorded as 'Other Operating Expenses.' Further details of the terms of the settlement are confidential.

* Price action: NOK shares traded lower by 1.42% at $4.86, while ERIC shares traded higher by 0.15% at $13.31 in the premarket session on the last check Wednesday.