Nokia and Siemens have reached a definitive agreement to take over Nokia Siemens half stake in Nokia Siemens Network (NSN). The transaction has been approved by the Nokia Board of Directors and the management and board of Siemens. Nokia writes in a press release, the price for Siemens stake is 1.7 billion euros and the acquisition is expected to close in the third quarter of this year.
Rumors of the deal leaked out on Sunday evening, but confirmed by the Finnish mobile giant on Monday morning(today). A contract that bound Nokia and Siemens to NSN expired in April and both companies have been looking for a way to end the partnership in the network company, which competes with Ericsson.
With the acquisition of the stake NSN will become a wholly owned subsidiary of Nokia, paying 1.2 billion euros in cash at the closing of the deal. This amount is financed through banks, while the remaining 0.5 billion euros will be paid after one year.
Nokia CEO Stephen Elop commented in the press release:
“With its strong strategic focus and strong leadership, NSN structurally improved operational and financial performance. Moreover, NSN established a clear leadership position in LTE, which offers attractive growth potential.”
Nokia plans to keep the current NSN management and its geographical structure. NSN’s ongoing restructuring will also continue. Siemens part of the name, however, will be phased out, and a new name for NSN will be announced when the transaction closes. The transaction is subject to customary regulatory approvals.
Nokia Siemens Networks operational headquarters will remain in Espoo, Finland, and the company will continue to have a strengthening regional presence in Germany, including its large presence in Munich. Nokia plans to support the current leadership in
its plans, including the ongoing restructuring which unaffected by today’s announced deal.
NSN was formed on 1 April 2007, Nokia and Siemens merged their respective businesses in telecom infrastructure. The company has been weighed down by heavy losses and made away with thousands of employees. In the most recent interim report for the first quarter of 2013, however, reported a profit for NSN.
Source: Nokia Press
Photo Credit: Fidel Ramos