Finnish mobile phone company Nokia said on Monday it has agreed to buy Siemens AG's stake in their joint venture Nokia Siemens Networks for 1.7 billion euros ($2.2 billion).
While Nokia has been struggling to compete against Apple and Samsung in smartphones, the network gear maker NSN has been posting profits in the past few quarters.
NSN turned profitable after massive cost cuts and as its focus on fourth-generation (4G) Long Term Evolution (LTE) networks has begun to pay off.
In the first quarter of this year NSN's adjusted earnings before interest and taxes (EBIT) amounted to 196 million euros.
"Nokia Siemens Networks has established a clear leadership position in LTE, which provides an attractive growth opportunity," Nokia Chief Executive Stephen Elop said in a statement.
The joint venture was formed in April 2007 and the agreement lapsed in April this year. Nokia had said it wants NSN to be sold or publicly listed. Many analysts believed NSN might be sold.
Nokia said it expected to close the transaction, subject to regulatory approval, during the third quarter of this year.
Nokia also said it estimated its net cash position was 3.7-4.2 billion euros at the end of the second quarter.