Nokia has just announced that it will be fully acquiring Siemens’ stakes in the Nokia Siemens Networks – a data networking and telecommunications equipment company and a joint venture between Nokia and Siemens.

Nokia will be acquiring Siemens’ 50 percent stake in the company. Reports state that the deal has been approved by Nokia’s Board of Directors as well as Siemens’ Managing and Supervisory Boards, but it’s still subject to the customary regulatory approval process.

The acquisition is priced at €1.7 billion ($2.2 billion).  The majority of this sum, €1.2 billion, will be paid in cash at the end of the transaction, while the remaining balance will be paid in the form of a secured loan from Siemens due one year from closing.

Stephen Elop, President and CEO of Nokia, had this to say:

“With its clear strategic focus and strong leadership team, Nokia Siemens Networks has structurally improved its operational and financial performance,”

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

Nokia Siemens Networks was at one time an unprofitable venture, which the two companies previously tried to sell to private investors.  But due to a series of cost-cutting initiatives, like removing almost a quarter of its workforce, the company has now become a lucrative business posting a profit of €899 million ($1.2 billion) during the first quarter of 2013.

Nokia Siemens Networks will be rebranded once the deal is completed, with that expected to happen during the third quarter of 2013.  As for the company’s management, Nokia plans to retain the existing management and governance structure with Rajeev Suri continuing as CEO and Jesper Ovesen continuing as Executive Chairman of the Nokia Siemens Networks Board of Directors, which will adjust to the changing ownership structure.

Joe Kaeser, Siemens CFO, commented:

“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. The full acquisition of Nokia Siemens Networks by Nokia offers an attractive opportunity to actively shape the telecom equipment market for the future and create sustainable value.”