Nokia Siemens Networks (NSN) sold its microwave business unit to DragonWave for €10 million in cash and €5 million in shares.
This divestment, the first since the appointment of NSN's new chairman, Jesper Ovesen, is seen by Jyske Bank analyst Robert Jakobsen as a possible indicator that similar deals will follow. DragonWave specialises in high-capacity packet microwave solutions for operators.
NSN's joint owners, Nokia and Siemens, recently injected €500 million each into the joint venture after failing to reach agreement with a number of perspective private-equity buyers. This decision to retain ownership also saw Ovesen being appointed with the objective to improve NSN's financial strength and boost business independence, with an IPO being one of several options for the future.
Commenting further on the sale, Jakobsen told Dow Jones Newswires: "[Nokia and Siemens] will gradually start to focus on selling non-core technology holdings in order to strengthen the balance sheet," adding that NSN could also sell off operations where it lacks scale, so it won't need further capital injections.
As part of the deal around 360 Nokia Siemens employees will be transferred to DragonWave. The deal is unusual in that NSN will retain responsibility for its existing solutions sales and services for microwave transport, with DragonWave being responsible for the R&D, management and operations functions of the equipment.
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