Nokia and Siemens have announced that the Finnish firm would buy out Siemens' entire stake in the companies' joint venture, called Nokia Siemens Networks. Nokia will pay EUR 1.7 billion ($2.2 billion) for the company, of which EUR 1.2 billion will be paid in cash.
The boards of both Siemens and Nokia have already agreed to the terms of the acquisition and are now awaiting regulatory approval. The transaction is expected to close sometime in Q3 of 2013, at which point Nokia Siemens Networks will become a fully owned subsidiary of Nokia.
It's not yet clear what the new company will be called, but Nokia has confirmed that it will phase out the Siemens name from the new company's branding.
"With its clear strategic focus and strong leadership team, Nokia Siemens Networks has structurally improved its operational and financial performance," said Stephen Elop, president and CEO of Nokia. "Furthermore, Nokia Siemens Networks has established a clear leadership position in LTE, which provides an attractive growth opportunity. Nokia is pleased with these developments and looks forward to continue supporting these efforts to create more shareholder value for the Nokia group."
Nokia Siemens Networks was first launched in 2007 with the intention of synergizing the offerings of Nokia's Networks Business Group and Siemens' mobile network technology. The combined company is now one of the leading providers of telecom infrastructure in the world, with operations in over 150 countries.
"With this transaction, we continue our efforts to strengthen our focus on Siemens' Core areas of Energy management, Industry and Infrastructure as well as Healthcare," said Joe Kaeser, Siemens CFO. "The full acquisition of Nokia Siemens Networks by Nokia offers an attractive opportunity to actively shape the telecom equipment market for the future and create sustainable value."
Recognizing the achievements already accomplished by Nokia Siemens Networks, Nokia has stated that it intends to keep the company's management structure intact and will not interfere with a restructuring plan already underway within the company.
