Nokia buys out Siemens subsidiary
01 July 2013 | Kavit Majithia
Nokia has bought Siemens entire 50% stake in its joint venture Nokia Siemens Networks (NSN).
The deal is worth approximately €1.7 billion, and it is expected to close in Q3 2013.
As a result of the acquisition, NSN will become a wholly owned subsidiary of Nokia, and Stephen Elop, president and CEO at the company claimed one of the major drivers towards the deal was its leadership position in LTE.
“With its clear strategic focus and strong leadership team, NSN has structurally improved its operational and financial performance,” he said.
The joint venture was first established in 2007, and combined Nokia’s business group with Siemens’ carrier operations for fixed and mobile networks.
“With this transaction, we continue our efforts to strengthen our focus on Siemens’ core areas of energy management, industry and infrastructure as well has healthcare. 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 said it will consolidate NSN for its financial results, while aiming to strengthen the company as a more independent entity. It will retain the company’s existing management and governance structure, with Rajeev Suri continuing as CEO.
€1.2 billion of the close price will be paid in cash, with the remainder paid in the form of a secured loan, due one year after the deal is closed.
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