Nokia Corporation (ADR) (NOK) Takes Siemens AG (ADR) (SI) Off the Hook

Nokia Corporation (ADR) (NYSE:NOK) decided to be the subject of some breaking news across our newsroom desk Sunday – our usual kinda off-day. Oh well. It is the kinds of news that may cause some ripples through the market Monday, as it involves that Nokia Siemens Networks joint venture which was due to dissolve in some way or another any day now. Looks like that day is going to come after all.

It was reported Sunday that after Siemens AG (ADR) (NYSE:SI) was reportedly shopping its 40-percent stake in Nokia Siemens with a few private-equity firms, it has agreed to let Nokia Corporation (ADR) (NYSE:NOK) purchase the half-ownership stake for about $2.5 billion (a little less than 2 billion euros) – a deal which would eliminate  options that were discussed, which included the joint venture breaking up or the two parent companies agreeing to an IPO for the venture. The deal could be officially announced Monday at the earliest.

Nokia Corporation (ADR) (NYSE:NOK) out of Finland and Germany’s Siemens AG (ADR) (NYSE:SI) combined forces to make a telecommunications equipment company six years ago. That contract expired in April, and it seemed all along that the two sides were not going to stay together one way or another. And  after talks with Microsoft Corporation (NASDAQ:MSFT) to buy the Nokia handset division fell through, Nokia decided to make an aggressive play to take on the telecom equipment into its fold. Whether this pending deal was a reason that Microsoft didn’t pull the trigger on Nokia, and whether this deal would get Microsoft back in the game later this year remains to be seen.

We may hear full details about this deal when it is officially announced, though word a bridge loan being used to finance the transaction is being reported. But at first blush, what do you think?

Is Nokia Corporation (ADR) (NYSE:NOK) making the right move, or do you see this as too risky for a company just trying to make a comeback in the difficult mobile market?  How do you think investors like billionaire fund manager Jim Simons will take this news? (See his portfolio here.) Do you think the relative stability of telecom equipment will benefit Nokia in the long run, and do you think Siemens AG (ADR) (NYSE:SI) will be affected by this deal? Give us your thoughts in the comments section below.

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