Nokia Corporationhas announced today that it will be fully acquiring Nokia Siemens Networks(NSN). As part of the deal, Nokia have entered into a definitive agreement which Nokia will acquire Siemens’ entire 50% stake in their joint venture.
The purchase price for Siemens’ stake is EUR 1.7 billion(estimated US$ 2.2 billion) and the transaction is expected to close during the third calendar quarter of 2013. Upon closing of the planned acquisition, Nokia Siemens Networks will become a wholly owned subsidiary of Nokia.
Nokia plans to retain the existing management and governance structure at Nokia Siemens Networks, with Rajeev Suri continuing as CEO and Jesper Ovesen continuing 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 regional presence in Germany, including its major hub in Munich. Nokia said it supports the current management plan, including the already in-progress Nokia Siemens Networks restructuring plan that remains unchanged as a result of this announcement.
In accordance with this transaction, 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 purchase price totals EUR 1.7 billion, of which EUR 1.2 billion will be paid in cash at the closing of the transaction. The balance of EUR 0.5 billion will be paid in the form of a secured loan from Siemens due one year from closing. Nokia has obtained committed bank financing for the EUR 1.2 billion cash portion.
At the end of the first quarter 2013, Nokia had gross cash of EUR 10.1 billion and net cash of EUR 4.5 billion. Nokia currently estimates that at the end of the second quarter 2013, Nokia had gross cash of between EUR 9.2 billion – EUR 9.7 billion and net cash of between EUR 3.7 billion – EUR 4.2 billion.
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 Siemens Networks has since become a global provider of telecommunications infrastructure, with deployments in more than 150 countries around the world. The company’s focus is to offer innovative mobile broadband technology and services.
The acquisition has been approved by the Board of Directors of Nokia as well as the Managing and Supervisory Boards of Siemens, and is subject to the customary regulatory approval process.