Well, it looks like there’s some good news coming out of Finland tonight, as Bloomberg is reporting that Nokia has agreed to buy out the half of the joint-venture from Siemens. Nokia-Siemens Networks had been losing money until recently and Siemens had wanted to get away from the deal, so it’s not too much of a surprise that Nokia would pick up the now profitable division.
The sale price is reportedly “less than 2 billion euros ($2.6 billion)” and Nokia will use a bridge loan to help finance the purchase, in a deal that some investors will welcome while others may frown upon due to the tight purse strings already at the struggling smartphone maker.
Formed in 2006, Nokia Siemens Networks operates IPTV, WCDMA refarming, mobile TV, mobile backhaul and other “behind the scenes” technologies that power our mobile internets. The deal will help Nokia in the long run due to the profitable nature of the business, especially with some drastic cutbacks in recent years to help streamline their workforce. The business is also based in Espoo, Finland, meaning those jobs should be safe from a third-party purchaser.
Both Siemens and Nokia declined to comment on the deal, but an official announcement could come as early as tomorrow. Bloomberg has a fairly good history on these reports, noting that three people “familiar with the matter” have verified its authenticity.
The news comes as a last minute Board of Directors meeting was called at Nokia HQ recently, causing all sorts of hypothetical situations. Everything from Nokia being purchased by Microsoft to divvying up the company were floated, but in the end we defaulted with the Siemens deal as being the most likely and now that seems to be the case.
More as it comes in.
Update: It's official. Nokia has just sent out a press release confirming the report from Bloomberg. Nokia will acquire the entire 50% of Siemen's stake in the joint venture. The price? A cool 1.7 billion euros that Nokia will pay to complete the transaction. Pending regulatory approval, the deal should close sometime during the third quarter of this year. You can read the entire press release right here.
Source: Bloomberg
