Report: Nokia, Siemens aim to restructure JV after failing to attract investors
Nokia (NYSE:NOK) and Siemens are aiming to restructure their joint venture--Nokia Siemens Networks (NSN)--after failing to find a buyer for a controlling stake in the business, according to the Wall Street Journal. That means the two companies might have to invest more money into NSN.
Earlier this month, reports surfaced that two of the potential bidders for NSN backed away from acquiring a majority stake. The U.S.-based private equity groups, KKR and TPG, reportedly became frustrated by slow progress and lack of flexibility on price and ownership levels. A consortium of the Gores Group and Platinum Equity also reportedly were bidding for a controlling stake in the joint venture, which officially ends in 2013.
Nokia Siemens has been holding discussions with private equity firms about buying a stake in the joint venture between Finland's Nokia and Germany's Siemens since August 2010.
Siemens CFO Joe Kaeser told reporters in May that NSN would focus on gaining market share and profitability. Kaeser seemed to indicate that a stake sale was not a top priority; he said that such a sale "is not a determinant in the business development" for Nokia Siemens, and that a sale is an option that is "not interesting."
In the first quarter, Nokia Siemens narrowed its operating loss to $203 million, down from $322.5 million in the year-ago quarter. Sales clocked in at $4.6 billion, up from $3.94 billion in the year-ago period. The company also closed its $975 million acquisition of Motorola Solutions' (NYSE:MSI) wireless networking business at the end of April, after months of delays. That deal is expected to improve NSN's position in the United States and Japan.
- see this Wall Street Journal article (sub. req.)
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