MUMBAI: Finnish handset maker Nokia will shell out $ 2.2 billion to buyout its German partner Siemens AG of their network equipment joint venture (JV).

The deal is likely to bring some stability to loss-making Nokia after it stumbled in smartphones. It also gained full control of the profitable venture, Nokia Siemens Networks (NSN), at a cheaper than-expected price, analysts said.

Nokia fell behind rivals Apple Inc and Samsung Electronics Co in the smartphone race, making the controversial decision to switch to Microsoft's untried Windows software in 2011.

In contrast, NSN turned profitable in Q2 2012 after slashing costs and as its focus on fourth-generation Long Term Evolution (LTE) networks began to pay off, report said.

NSN's adjusted earnings before interest and taxes (EBIT) amounted to 196 million euros in the first quarter of this year.

Nokia will pay 1.2 billion euros in cash and the other 0.5 billion euros will take the form of a secured loan from Siemens that will be repaid later.

Nokia and Siemens formed the 50-50 joint venture in April 2007 and the agreement lapsed in April this year. Nokia had said it had wanted NSN to be sold or listed.