It will pay €1.7 billion ($2.21 billion) for half of the joint venture

Jul 1, 2013 06:36 GMT  ·  By

Today, Finnish mobile phone maker Nokia announced an agreement with Siemens for the acquisition of the latter’s 50 percent stake in the Nokia Siemens Networks joint venture.

The company also announced that the purchase had already been approved by both Nokia’s Board of Directors and the Managing and Supervisory Boards of Siemens, and that it awaits customary regulatory approvals.

Nokia will pay €1.7 billion ($2.21 billion) to Siemens as part of this deal, which is expected to close before the end of the third quarter of the year.

Following the completion of the transaction, Nokia Siemens Networks will become Nokia’s wholly owned subsidiary.

“With its clear strategic focus and strong leadership team, Nokia Siemens Networks has structurally improved its operational and financial performance,” Stephen Elop, president and CEO of Nokia, said.

“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.”

Established on April 1, 2007, Nokia Siemens Networks has become a leading global provider of telecommunications infrastructure, with networks deployed in over 150 countries around the world. Nokia plans on keeping the existing management structure at Nokia Siemens Networks, which has Rajeev Suri as its CEO and Jesper Ovesen as executive chairman of the Nokia Siemens Networks Board of Directors. A new name for the company will be announced shortly.

Nokia Siemens Networks will keep its operational headquarters in Espoo, Finland, while continuing its strong regional presence in Germany, which includes a major hub in Munich. The already in-progress restructuring of the company will remain unchanged as a result of the acquisition.

“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,” Joe Kaeser, Siemens CFO, stated.

“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.”