JP Morgan's financing will allow Nokia to afford to buy out Siemens' 50 percent stake in joint-venture Nokia Siemens Networks (NSN).
Nokiato buy out Siemens' stake in the venture the companies own this week. Nokia will acquire the remaining 50 percent stake for 1.7 billion euros ($2.2bn), 70 percent of which is due to be paid in cash. The remaining 30 percent will be covered through a short-term financing loan.
Citing banking sources, Reuters reports that financial services firm JP Morgan is leading the acquisition by backing the Finnish mobile handset maker with 1.2 billion euro (1.56 billion USD) in loans. This financial help will cover the 1.2 billion euro cash portion due at the closing of the buyout.
Nokia chief executive Stephen Elop said:
"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."
In June, reports surfaced which suggested Siemens wasto take over the company's 50 percent stake in the telecommunications equipment maker. Amongst the potential buyers Siemens is said to have approached were TPG, Blackstone Group and KKR & Co.
As these attempts fell short, the joint venture was then said to be mulling over a potential bond sale to ascertain whether there was financial interest in the company.
The joint venture, now fully owned by Nokia, has struggled in recent years against stiff competition. A number of divisionswere sold off to try and "strategically focus" on core aspects of the telecommunications equipment firm and remodel the JV as a mobile broadband specialist. In addition, job cuts and factory closures cut operational costs as part of a wider company restructuring effort.
The deal is due to be finalized in Q3 2013.