nokia-signNokia has announced that it has taken full control of its telecoms equipment joint-venture Nokia Siemens Network, after it agreed to buy out partner Siemens in a €1.7 billion ($2.2 billion) deal.

Full control of the now-profitable business will help offset losses that Nokia has incurred from its hardware and Windows Phone business. Nokia recorded a loss of $196 million during Q1 2013.

Nokia Siemens Networks was an unprofitable venture that both Nokia and Siemens had unsuccessfully tried to sell to private investors last year. However, a series of cost-cutting initiatives — which included the slashing of 17,000 jobs (just shy of one-quarter of the total workforce) — have seen earnings improve significantly and turn the company into a lucrative one.

Nokia Siemens Network posted profit of €899 million ($1.2 billion) during Q1 2013, which represented a 117 percent increase on the previous year. That’s despite the value of net sales actually contracting 5 percent annually. Profit in Q4 2012 was higher still, coming in at €1.197 billion ($1.56 billion).

The deal is expected to be completed during the third quarter of 2013. It says that the business will become a wholly owned subsidiary of Nokia. The company confirmed that Nokia Siemens Network will be renamed, but it says it will reveal the new branding once the deal is completed.

The €1.7 billion deal will be paid for with €1.2 billion in cash, and the remainder via a secured loan due with Siemens one year after the deal is closed.

Source: TNW