Nokia to Buy Out Siemens Equipment Venture for $2.2B

nokia siemens nsn headquarters acquisition
Vesa Moilanen, AFP/Getty Images
By Amrutha Gayathri

Nokia will buy out partner Siemens AG's (SI) entire 50 percent stake in Nokia Siemens Networks, or NSN, paying €1.7 billion ($2.2 billion), as the former mobile phone leader struggles to regain its place in an increasingly crowded and competitive market.

The deal will allow the loss-making Finnish corporation to gain full control of NSN, which returned to profitability last year, after undertaking a series a cost-cutting measures, Bloomberg reported, including slashing 17,000 jobs, which accounted for almost a quarter of its global workforce, in November 2011.

"With this transaction, Nokia buys itself a future, whatever happens in smartphones and feature phones," Pierre Ferragu, an analyst at Sanford C. Bernstein in London, told Bloomberg. "Nokia Siemens has a future in the network equipment world, with a streamlined operation and a No. 2 position in a now concentrated and stable market."

Nokia (NOK) is taking over NSN when the joint venture's focus on fourth-generation Long Term Evolution, or LTE, networks has begun to pay off, according to Reuters, translating into €196 million in adjusted earnings before interest and taxes, in the first quarter of 2013.

More from International Business Times

Increase your money and finance knowledge from home

Getting out of debt

Everyone hates debt. Get out of it.

View Course »

Intro to different retirement accounts

What does it mean to have a 401(k)? IRA?

View Course »

Add a Comment

*0 / 3000 Character Maximum