Finnish mobile device maker Nokia (NOK) announced it will buy out Siemens’ (SI) 50 percent stake in Nokia Siemens Networks, a joint telecommunications venture between the two vendors, for some $2.2 billion, confirming an earlier Bloomberg news report.

The transaction, which has gained the approval of Nokia’s board of directors and Siemens’ managing and supervisory boards, is expected to close during the third calendar quarter of 2013. Under terms of the agreement, Nokia Siemens Networks will become a wholly owned Nokia subsidiary. Nokia said it will continue to consolidate Nokia Siemens Networks for financial reporting purposes.

"With its clear strategic focus and strong leadership team, Nokia Siemens Networks has structurally improved its operational and financial performance,” said Stephen Elop, Nokia president and chief executive. “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 launched in 2007 as a joint venture combining Nokia’s Networks business unit and Siemens’ carrier operations for fixed and mobile networks. In recent quarters, the venture’s cost-cutting has produced improved performances, and, according to the company, it is tracking to meet its goal of saving $1.3 billion in operating expenses for the year. Stiff competition from rivals Huawei and ZTE forced the company to lop some 23 percent, or 17,000 jobs, from its employment rolls about two years ago. 

Joe Kaeser, Siemens chief financial officer, said the transaction enables Siemens to exit the wireless business in an overall effort to divest itself of non-core engagements.

"With this transaction, we continue our efforts to strengthen our focus on Siemens' core areas of energy management, industry and infrastructure as well as health care,” he said. “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 said it will retain the existing Nokia Siemens Networks management team, including chief executive Rajeev Suri and executive board chairman Jesper Ovesen. The company’s headquarters will remain in Espoo, Finland, and it will continue to operate a hub in Munich, Germany. Nokia, which said it has no plans to alter existing plans to restructure Nokia Siemens Networks, will phase out the Nokia Siemens Networks' company name and branding and a new company name will be announced when the deal closes.