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The company is to purchase Siemens’ 50 per cent stake for EUR1.7 billion (US$2.2 billion), partly funded by a secured loan.
The acquisition will give the Finnish mobile company access to Siemens’ finances at a below-estimate cost.
However, no integration of the two companies is planned, with partnerships a future possibility, Stephen Elop, chief executive officer (CEO) at Nokia, toldBloomberg.
Pierre Ferragu, analyst at Sanford C. Bernstein London, said: “With this transaction, Nokia buys itself a future, whatever happens in smartphones and feature phones.”
He added: “Nokia Siemens has a future in the network equipment world, with a streamlined operation and a number two position in a now concentrated and stable market.”
Meanwhile, Nokia reported a lowest quarterly revenue for more than 13 years for April, with a 20 per cent decline in its sale figures owed to Asian manufacturer’s Android-operated device releases.