Nokia to swallow up Nokia Siemens Networks joint venture for LTE focus

Nokia to take full control of network and telecoms joint venture as Siemens bails out

Nokia is set to take complete control of Nokia Siemens Networks (NSN), a joint venture between it and German electronics giant Siemens. The move will give the Finnish phone giant a commanding position in the market for LTE communications equipment, while Siemens looks to focus on other core areas.

Nokia said it has entered a definitive agreement with Siemens AG to acquire its 50 percent stake of Nokia Siemens Networks. The €1.7bn deal is expected to close during the third quarter of 2013, subject to approval by the relevant regulatory authorities, but has been given the go-ahead by both Nokia's board of directors, and the management and supervisory Boards of Siemens.

The phone maker said it will consolidate Nokia Siemens Networks for financial reporting purposes, but intends to strengthen the company as a more independent entity. To this end, it will retain the existing management and governance structure. The Current Nokia Siemens Networks chief executive Rajeev Suri will continue to head up the subsidiary, for example.

Nokia chief executive Stephen Elop said in a statement that the move will benefit his firm, as the joint venture has already established itself in a leading position in the market for telecoms equipment to support the deployment of next-generation mobile networks.

"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," Elop commented.

However, it appears that the move may have as much to do with Siemens seeking to focus on other areas of its business as it does with Nokia's plans.

Siemens chief finance officer Joe Kaeser 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."

Nokia Siemens Networks was formed at the start of 1997, and saw the merger of Nokia's Networks Business Group, and the fixed and mobile networks operations of Siemens' Communications Division.

A new name and brand for the subsumed Nokia Siemens Networks will be confirmed once the transaction has completed, while the Siemens name will be phased out.