Nokia Spends $2.2 Billion To Take Control of Nokia Siemens Networks
Nokia has bought full control of the joint-venture Nokia Siemens Networks. They bought out their partner Siemens for €1.7 billion ($2.2 billion). Of the €1.7 billion, €1.2 billion will be paid and cash and the rest will be paid in the form of a secure loan due with Siemens one year after the deal is closed.
We reported about a potential deal last month, but we were speculating that Siemens was going to sell their share to private equity companies.
The full control of the Nokia Siemens Networks will help offset the losses that Nokia has been seeing in their hardware and mobile division. Nokia reported a loss of $196 million for Q1 2013. For Q1 2013, Nokia Siemens Network hit a profit of €899 million ($1.2 billion), which is a 117% increase from the previous year.
“With its clear strategic focus and strong leadership team, Nokia Siemens Networks has structurally improved its operational and financial performance. 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,” stated Nokia CEO and President Stephen Elop.
This deal is expected to be closed in Q3 2013. Nokia Siemens Networks will become a wholly owned subsidiary of Nokia. Nokia Siemens Network will be renamed after the deal is completed.