Private equity firms are reported to be in discussion with Nokia Siemens Networks (NSN) about injecting US$1 billion for a minority stake. The proposed deal would arm NSN with the capital to finance its recent US$1.2 billion acquisition of Motorola's network equipment business, and provide it with valuable experience on integrating large businesses.
However, the deal, which involves Blackstone, TPG, Silver Lake Partners and Bain Capital, is said to be at an initial stage and could still fail. The major hurdle is that the private equity firms would need to partner as the US$1 billion equity investment would be too large for any of them alone.
These negotiations, together with the planned purchase of Motorola's infrastructure business, are being seen as a route whereby NSN's parents, Nokia and Siemens, can start to exit the JV.
While both firms are contractually committed to the 50-50 venture until 2013, if NSN does manage to attract private equity investors then analysts believe an IPO could become a real possibility.
However, details are starting to leak out on NSN's deal to acquire the Motorola unit where rival Huawei apparently out-bid NSN by 10 per cent. NSN countered this offer by allowing Motorola to keep an additional US$150 million in accounts receivable, cash and some other assets. Motorola was also allowed to retain most of the patents associated with network infrastructure business.
For more on this story:
- read Financial Times (reg req) & Bloomberg
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