Nokia shares popped higher Monday after the company bought Siemens out of their profitable joint venture in telecoms networks.

The Finnish company paid 1.7 billion euros ($2.2 billion) for Siemens (SI)' 50% stake in Nokia Siemens Networks, a move which broadens its range of strategic options and buys time as it attempts to revive its ailing handset business.

Nokia (NOK) has been searching for a way to return to profit after falling way behind rivals like Apple (AAPL) and Samsung (SSNLF).

Sales of its Lumia handset jumped 27% in the first quarter but group revenue plunged and it posted an operating loss of 150 million euros.

Nokia Siemens Networks, which competes with China's Huawei and ZTE Corp (ZTCOF), returned a healthy profit in the first quarter, helped by its focus on 4G Long Term Evolution (LTE) networks.

"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.

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The Nokia Siemens Network price tag was lower than analysts were expecting and Nokia's Helsinki-listed shares jumped as much as 10% before trimming gains to stand around 7% higher at 3.05 euros.

"We also believe Nokia is acquiring this asset at a very attractive price, well below what an initial public offering or trade sale could bring in the future," Liberum Capital analysts said in a research note.

Nokia plans to announce a new name and brand for its networks equipment unit when the transaction closes during the third quarter of 2013.

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Nokia Siemens Networks' management team will be retained and it will continue to be based in Espoo, Finland, with a strong presence in Germany.

The joint venture was established in 2007, combining Nokia's networks business and Siemens' carrier-related operations for fixed and mobile networks.