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Nokia has officially taken full control of its telecoms equipment joint venture Nokia Siemens Network after buying out Siemens in an estimated €1.7-billion (US$2.2-billion) deal.
The takeover will be welcomed by those within the embattled Finnish phone maker’s fold. Nokia Siemens Network has been one of the company’s few profitable divisions for a little while now and having it entirely under its control will help offset losses from its hardware and Windows Phone businesses.
As The Next Web notes, the division had previously battled to stay afloat, especially as it faced pressure from the likes of Chinese companies such Huawei and ZTE. A series of cost-cutting initiatives — which included cutting back a quarter of the workforce — however made it significantly more lucrative.
Despite net sales decreasing by five percent, Nokia Siemens Network actually reported solid results in Q1, with profits rising 117% to €899-million (US$1.2-billion).
Nokia CEO Stephen Elop said that the division’s work in LTE in particular was likely to stand it in good stead in the future:
“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.”
In an official statement announcing the deal, Nokia said that 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 transaction.
The €1.7-billion transaction will see Nokia pay Siemens €1.2-billion in cash at the closing of the transaction. The remainder will be paid using a secure loan from Siemens due one year from the deal’s closing.