Finnish telecom equipment maker Nokia is buying the half stake owned by German engineering giant Siemens in their joint broadband venture NSN. The move comes as both firms are in restructuring mode.
Nokia shares, which had fallen sharply because of the companies' problems with mobile phone sales, jumped by almost 8 percent on the news that it would be the sole owner of Nokia Siemens Networks (NSN).
"Once the deal is concluded in the third quarter of 2013, NSN will become a wholly owned subsidiary of Nokia," both firms said in a statement on Monday.
The buyout will wash a total of 1.7 billion euros ($2.2 billion) into Siemens' corporate coffers, money it needs in its restructuring process after announcing the shutdown of its loss-making solar energy unit.
For Nokia, the move means it will be able to take full control of its most profitable business. It will continue betting on the technology to run 4G networks after it stumbled as a maker of smartphones.
"With the transaction, Nokia buys itself a future, whatever happens in smartphones and feature phones," Bernstein analyst Pierre Ferragu said in a statement.
The NSN high-speed mobile broadband venture was set up back in 2007, with the partnership agreement expiring in April of this year. Nokia said NSN's headquarters would remain in Espoo, Finland.
hg/hc (Reuters, AFP)