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Nokia to fully acquire Siemens’ stake in Nokia Siemens Networks (Press Release)

July 1, 2013 No Comments


Nokia to fully acquire Siemens’ stake in Nokia Siemens Networks

 Nokia Corporation
Stock Exchange Release
July 1, 2013 at 07.00 (CET +1)

Espoo, Finland and Munich, Germany – Nokia Corporation and Siemens AG today announced that they have entered into a definitive agreement  pursuant to which Nokia acquires Siemens’ entire 50% stake in their joint  venture, Nokia Siemens Networks. The acquisition has been approved by the Board  of Directors of Nokia as well as the Managing and Supervisory Boards of Siemens,  and is subject to the customary regulatory approval process.

The purchase price for Siemens’ stake is EUR 1.7 billion and the  transaction is expected to close during the third calendar quarter of 2013. Upon  closing of the planned acquisition, Nokia Siemens Networks will become a wholly  owned subsidiary of Nokia.

Stephen Elop, President and CEO of Nokia, commented: “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.”

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.”

Nokia Siemens Networks was established on April 1, 2007, as a  joint venture combining Nokia’s Networks Business Group and Siemens’  carrier-related operations for fixed and mobile networks. Nokia Siemens Networks  has since become a leading global provider of telecommunications infrastructure,  deploying networks that help people stay connected in more than 150 countries  around the world. The company’s focus is in offering innovative mobile broadband  technology and services.

Nokia will continue to consolidate Nokia Siemens Networks for  financial reporting purposes as well as continue to strengthen the company as a  more independent entity.

Accordingly, Nokia plans to retain the existing management and  governance structure at Nokia Siemens Networks, 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.

Nokia Siemens Networks’ operational headquarters will remain in Espoo, Finland, and the company will continue to have a strong regional presence  in Germany, including its major hub in Munich. Nokia supports the current  management plan, including the already in-progress Nokia Siemens Networks  restructuring plan that remains unchanged as a result of this announcement.

In accordance with this transaction, the Siemens name will be  phased out from Nokia Siemens Networks’ company name and branding. Nokia and  Nokia Siemens Networks plan to confirm the new name and brand at the closing of  the transaction.

The purchase price totals EUR 1.7 billion, of which EUR 1.2  billion will be paid in cash at the closing of the transaction. The balance of  EUR 0.5 billion will be paid in the form of a secured loan from Siemens due one  year from closing. Nokia has obtained committed bank financing for the EUR 1.2  billion cash portion.

At the end of the first quarter 2013, Nokia had gross cash of EUR  10.1 billion and net cash of EUR 4.5 billion. Nokia currently estimates that at  the end of the second quarter 2013, Nokia had gross cash of between EUR 9.2  billion – EUR 9.7 billion and net cash of between EUR 3.7 billion – EUR 4.2  billion. For comparison purposes, if the transaction to purchase Siemens’ 50%  stake had been closed during the second quarter 2013, Nokia currently estimates  that it would have ended the second quarter of 2013 with gross cash of between  EUR 9.2 billion – EUR 9.7 billion and net cash of between EUR 2.0 billion – EUR  2.5 billion, reflecting the deduction of the purchase price of EUR 1.7 billion from Nokia net cash.

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