Nokia pays Siemens £1.5bn for full control of NSN venture

Nokia has announced a deal to buy up Siemens' 50 per cent stake in Nokia Siemens Networks (NSN) for €1.7 billion (£1.5 billion).

The joint venture, which manufactures and sells telecommunications infrastructure equipment to mobile phone carriers has only relatively recently become profitable, having recorded operating losses in five of the last nine quarters.

"Nokia Siemens Networks has established a clear leadership position in LTE, which provides an attractive growth opportunity," said Nokia CEO Stephen Elop. "Nokia is pleased with these developments and looks forward to continue supporting these efforts to create more shareholder value for the Nokia group."

The Finnish company will maintain the current structure in place at NSN, with Rajeev Suri staying on as CEO. There are also no strategy shifts on the horizon, according to Nokia.

"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," said Joe Kaeser, CFO at Siemens.

NSN is in direct competition with Huawei in the telecommunications supplies market, but now has a huge advantage over the Chinese firm, since it was banned from the US due to security fears.

The NSN partnership in November 2011 was forced to makes cuts, slashing 17,000 jobs (around 23 per cent of the total workforce). This move soon proved a stroke of genius, as NSN then became profitable in the second quarter of 2012.

The acquisition of Siemens' stake is expected to close during the third quarter of this year, at which point Nokia will reveal the new name and brand of the organisation.

The figures for Nokia's latest quarter will be announced on 18 July.