Nokia Siemens Networks offices in Espoo Karaportti. Photo Lehtikuva
Nokia Corporation has bought the Siemens AG’s entire stake from their joint venture of networks business at a cost of EUR 1.7 billion, an announcement said Monday.
The acquisition of entire 50 per cent stake of Siemens from the Nokia Siemens Networks has been approved by the Board of Directors of Nokia as well as the Managing and Supervisory Boards of Siemens, a press release said.
The transaction of EUR 1.2 billion in cash is expected to close during the third quarter of 2013, the announcement said. The remaining EUR 0.5 million will be paid from a secured loan in a year time after the closing.
Nokia has obtained committed bank financing for the EUR 1.2 billion cash portion.
The Nokia Siemens Networks will be a subsidiary of Nokia once the planned acquisition is completed and the name of Siemens will be phased out.
"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, adding that 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, said the Nokia president.
‘‘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, the CEO of Siemens said.
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.
Nokia Siemens Networks was established on April 1, 2007, as a joint venture combining Nokia's Networks Business Group and Siemens' carrier-related operations for fixed and mobile networks.
Nokia Siemens Networks has since become a leading global provider of telecommunications infrastructure, deploying networks that help people stay connected in more than 150 countries around the world.
The company's focus is in offering innovative mobile broadband technology and services.
Nokia will continue to consolidate Nokia Siemens Networks for financial reporting purposes as well as continue to strengthen the company as a more independent entity, said the company in the announcement.
Nokia plans to retain the existing management and governance structure at Nokia Siemens Networks, with Rajeev Suri continuing as CEO and Jesper Ovesen continuing as Executive Chairman of the Nokia Siemens Networks Board of Directors, which will adjust to the changing ownership structure and will remain headquartered in Espoo, Finland.
The company will continue to have a strong regional presence in Germany, including its major hub in Munich.
Nokia supports the current management plan, including the already in-progress Nokia Siemens Networks restructuring plan that remains unchanged as a result of this announcement.
