Shares in German engineering giant
Siemens and Finnish mobile phone maker Nokia jumped Monday after the
companies announced they were ending their telecoms joint venture.
Munich-based Siemens said it was selling its 50-per-cent stake in Nokia Siemens Network (NSN) to Nokia for 1.7 billion euros (2.2 billion dollars).
The 50-50 joint venture was set up in 2007, and provides telecommunications infrastructure for fixed and mobile networks.
Siemens' shares rose 2.61 per cent to 79.88 euros after the sale was announced. Nokia's stock surged by about 7 per cent to 3.05 euros.
The boards of both companies had approved the deal that was expected to be completed during the third quarter, pending approval from regulatory authorities.
Nokia said the acquisition would make NSN a fully owned subsidiary, and it planned to keep the existing management team.
Operational headquarters were to remain in Espoo, Finland, and it would continue to have a strong regional presence in Germany, including Munich where it has a hub, Nokia said in a statement.
The deal presented "an attractive growth opportunity," Nokia chief executive Stephen Elop said, citing the joint venture's leading position in wireless data communications technology, LTE.
The firms said 1.2 billion euros of the sales price would be paid in cash, the remaining 500 million euros was to be paid a year after the closing of the deal.
The joint venture has struggled with losses but in 2011 launched a cost-cutting programme. In the first quarter this year it reported an operating profit.
At the end of the first quarter, NSN had about 56,700 employees, a cut of 11,900 staff members year-on-year.
Most Popular Stories
- Fed Committee Optimistic About Growth Prospects
- Sales Show Samsung Needs Next Big Thing
- Judge Strikes Down Colo. Gay Marriage Ban
- Boehner Says No to Palin's Call for Impeachment
- FOMC Minutes From June 17 Meeting: Full Text
- Libyan Production Pushes Brent Crude Below $109
- U.K. Girds for Nationwide Strike
- Warren G. Harding's Spicy Love Letters to Be Released
- Is Eva Mendes Pregnant With Ryan Gosling's Baby?
- UTEP Students Tapped to Test Lunar Dust Device