Nokia Oyj, the Finnish based company, agreed to acquire the Siemens AG stake in their joint venture for an estimated $2.2 billion. The acquisition gives Nokia Oyj complete access to the phone equipment makers’ cash flow for less than the estimated price.
Nokia has said it will pay in cash $1.56 billion for Siemens 50% share in the Nokia Siemens Networks joint venture. The rest of the price for the Siemens share will be secured by a one-year loan.
There was no plan to integrate the venture and Nokia might look at possible partners, said Nokia CEO Stephen Elop.
The phone maker is attempting a comeback in the mobile handset market and on Monday, its shares traded up over 10% in Helsinki.
Siemens was attempting to a way to exit the wireless equipment manufacturing sector to put more focus in healthcare and infrastructure projects as well as energy.
An analyst based in London said the Finnish company had purchased a feature phones and smartphone market future no matter what takes place.
JPMorgan Chase & Co. will provide Nokia with financing in the new transaction, according to those close to the deal.
Nokia traded up 29 cents and was close to 7% higher in Helsinki at midday, which put the company value at over $15 billion.
Nokia Siemens will keep its headquarters in Espoo, Finland, said company reps from the two companies. The deal is expected to be completed before the current quarter ends the end of September.
Revenue for Nokia Siemens was $17.95 billion for 2012.