Nokia to acquire Siemens' stake in NSN
Deal expected to close in third quarter of the year
Finnish mobile phone maker Nokia has agreed to acquire Siemens' entire 50% stake in their joint venture, Nokia Siemens Networks, for EUR1.7bn.
Nokia will pay EUR1.2bn in cash at the closing of the transaction, while the balance of EUR500m will be paid in the form of a secured loan from Siemens due one year from closing.
Nokia has bank financing for the EUR1.2bn cash portion. The deal is expected to close in the third quarter of the year, and Nokia Siemens Networks will become a wholly owned subsidiary of Nokia.
The acquisition has been approved by the board of directors of Nokia and the managing and supervisory boards of Siemens, and is subject to the customary regulatory approval process.
Stephen Elop, president and CEO of Nokia, said: "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."
Joe Kaeser, Siemens CFO, said: "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. 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 said that it will continue to consolidate Nokia Siemens Networks for financial reporting purposes as well as continue to strengthen the company as a more independent entity.
Accordingly, Nokia plans to retain the existing management and governance structure at Nokia Siemens Networks, with Rajeev Suri continuing as CEO and Jesper Ovesen as executive chairman of the Nokia Siemens Networks board of directors, which will adjust to the changing ownership structure.
Nokia Siemens Networks' operational headquarters will remain in Espoo, Finland, and 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.
The Siemens name will be phased out from Nokia Siemens Networks' company name and branding. Nokia and Nokia Siemens Networks plan to confirm the new name and brand at the closing of the deal.