Nokia has reached an agreement with Siemens to purchase the latter’s stake in Nokia Siemens Networks. NSN was formed in 2007 as a mobile infrastructure equipment joint venture, but has been struggling and Siemens has been looking to cash out its stake for some time. Nokia will take full control of NSN for the price of €1.7 billion ($2.2 billion), with €1.2 billion in cash and the rest to be paid in the form of a secured loan one year after the deal closes.
The deal has been speculated for a while, so the only real surprise here is how cheaply Siemens sold its stake. That low price may be a sign of just how desperate Siemens was to get out of a joint venture that was selling off its units in an attempt to improve profitability.
Nokia expects to close the deal by the end of September. The head office of NSN will remain in Finland and the current management, including CEO Rajeev Suri and executive chairman Jesper Ovesen will be retained, though the membership of the board will be altered due to the changed ownership. One thing that won’t be sticking around is Siemen’s name as part of the company branding. There’s no indication of what Nokia will rename the venture to, but the smart money is on the obvious choice of Nokia Networks.