Nokia Siemens Networks has confirmed it is in talks regarding the sale of a stake worth up to $1 billion (€785 million), to boost efforts to turn the business around and prepare for an IPO.
The infrastructure vendor is discussing the sale with private equity investors including Blackstone, Silver Lake Partners and Bain Capital, executives told FT.com, believing the firm’s cost cutting and $1.2 billion acquisition of Motorola’s network business make it an attractive option.
Parent firms Nokia and Siemens are keen to sell as the joint venture is draining their balance sheets, FT.com said
The unit has run at a loss since being founded in 2007, with €1.6 billion lost in 2009 alone.
However, both firms will remain committed to the joint venture until at least 2013, when the current JV agreement expires, FT.com reported.
The announcement confirms earlier reports that NSN was seeking private investment.
NSN has been hurt by a prolonged period of reduced carrier spending on telecom infrastructure that resulted in the market contracting 5.2% in 2009 to $153.8 billion, according to Infonetics.
But the research firm predicts spending will pick up this year and drive the market to be worth $208.3 billion in 2014.
With NSN recently winning the first of what is to become a wave of tenders during India's 3G rollouts, the vendor could be one of the main beneficiaries of a recovery.