The move is surprising as many thought that Nokia would be sitting on all the cash it could, as its deal with Microsoft fails to take it to the heights it anticipated.
While Nokia is not doing that well, the network gear specialist NSN has been posting profits in the past few quarters.
Nokia said it expected to close the transaction, subject to regulatory approval, during the third quarter of this year.
Nokia Siemens Networks will become a fully owned subsidiary of Espoo, alhough Nokia hasn't yet announced what the restructured entity will be called.
Siemens CEO Joe Kaeser told Dow Jones Newswires, a while ago, that 2013 was the year his company would help "NSN to move into a better place" although it is strange that this was the place he had in mind, although we've seen Nokia's HQ and it is very nice.
Now he is saying Nokia's new acquisition is "an attractive opportunity to actively shape the telecom equipment market for the future and create sustainable value."
Nokia CEO and ex Microsoft man, Stephen Elop, spoke highly of NSN's recent financial growth.