Siemens out as Nokia is rumored to buy them out of the joint telecom equipment venture

nokia HQ

Based on reports from Bloomberg and Wall Street Journal, former German telecom firm Seimens will be oust by Nokia for all its 50 percent share of their joint Nokia Siemens Networks telecom equipment business. Reports further stipulate that, the Finnish cellphone maker will pay less than €2 billion (€1.7 billion, or $2.21 billion, says the WSJ), using short-term debt to finance the deal. The Nokia Seimens merger was formed in 2007, and has been unprofitable until last year, when cost cutting finally pushed it into the black for the first time.

Nokia’s phone sales have also not been great plus the $196 million loss last quarter, the company is arguably in a better place than it was a year ago, when it posted an operating loss of €1.3 billion, owing in large part to plummeting demand for Symbian devices.Am sure you have read our latest editorial about the downfall of their symbian OS. Demand for Lumia devices is no doubt growing (up 27 percent from the previous quarter), but an overall decline in handset shipments could be driving Nokia’s decision to invest more in other, more profitable businesses.

source: bloomberg businessweek