Finnish group Nokia has reached a definitive agreement to buy out Siemens from their telecoms equipment joint venture Nokia Siemens Networks (NSN) for EUR1.7 billion (USD2.2 billion). Nokia agreed to pay its German partner EUR1.2 billion in cash at the closing of the transaction, expected in the current quarter, with the remaining EUR500 million to be paid through a secured loan from Siemens due one year after closing, reports the Financial Times. NSN, headquartered in Finland, will drop the Siemens name from its company title. The report adds that the deal allows Nokia to consolidate NSN which is currently its most profitable asset, adding relative stability to the Finnish group’s struggling mobile phone unit, which had been rumoured to be under consideration for sale. Siemens, meanwhile, viewed NSN as a non-core asset and sought the sale to help cut costs and close the profitability gap with its engineering rivals, with the Munich-based group’s financial director Joe Kaeser quoted as saying: ‘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.’
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