According to Bloomberg, Nokia has agreed to buy full stake of Siemens in the Nokia Siemens Networks (NSN), a joint venture between the two that makes telecom equipment and provides related services. The deal is worth $2.2 billion (1.7 billion euro).
In a joint statement the companies revealed the terms of the deal. In the first phase, Nokia will pay 1.2 billion euro for Siemens’s 50 percent holding in NSN. The rest of amount will be paid in a secured loan due a year after the deal’s completion.
With this deal Nokia will retain full control of the telecom infrastructure solution provider, and Siemens will get out of the business to focus on energy, healthcare and locomotive business.
Pierre Ferragu, an analyst at Sanford C. Bernstein in London, has termed the deal “as a positive and negative for Nokia.” He explained that the transaction will give ““a more tangible long-term future for the group, but a tighter balance sheet for hardship to come.”
NSN’s current CEO Rajeev Suri will continue to lead the organization. The headquarter of the unit will remain in Espoo, Finland.