updated 07:28 am EDT, Mon July 1, 2013
Purchase to help Nokia 'actively shape' telecommunications equipment market
Nokia has agreed to purchase the entire 50-percent stake owned by Siemens in the Nokia Siemens Networks joint venture. The deal, reportedly worth 1.7 billion euro ($2.2 billion), sees Nokia take complete control of the company, which works on network infrastructure and the deployment of LTE-based mobile phone networks.
Claimed by sources of Bloomberg just hours before Nokia confirmed the purchase itself, the agreement has been approved by the boards of both Nokia and Siemens, but still faces regulatory approval. The purchase is expected to be completed by the third quarter, with the company becoming a wholly owned subsidiary of Nokia at that time.
Joe Kaeser, chief financial officer at Siemens, claimed the deal "offers an attractive opportunity to actively shape the telecommunications equipment market for the future and create sustainable value." Nokia CEO Stephen Elop echoed the comment, lauding the joint venture's "clear leadership position in LTE, which provides an attractive growth opportunity."
Despite signs of possible future growth, the company has had its issues since its creation in 2007. In 2011, the company started to cut its workforce by 17,000 employees, representing approximately 23 percent of company staff. After a failed attempt by Nokia to sell the company, also in 2011, Nokia Siemens Networks was forced to raise $1.6 billion from US and European banks in order to finance its restructuring.