Nokia 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.

The transaction had been speculated by Bloomberg — which quoted three sources close to the deal — and full control of the now-profitable business will help offset losses that Nokia has incurred from its hardware and Windows Phone business. The Finnish phone-maker recorded a loss of $196 million during Q1 2013.

Under pressure from the likes of Huawei and ZTE, 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).

Nokia expects the deal 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.

Stephen Elop, President and CEO of Nokia, said in a statement:

“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. Nokia is pleased with these developments and looks forward to continue supporting these efforts to create more shareholder value for the Nokia group.”

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.

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