Rumour Mill: NSN's future in the balance as Siemens scouts buyers

Siemens has approached private equity companies to discuss a possible sale of Nokia Siemens Networks according to reports in the Wall Street Journal and Reuters, which cited unnamed sources close to the matter.

The Journal report suggested that Siemens also favours a sale of the company in its entirety, rather than just its 50 per cent stake. Nokia is also believed to be exploring a possible buyout of its German partner's stake in the 50-50 telecoms equipment joint venture, the report added. The entire NSN business has been valued at a possible €7 billion ($9.3 billion) including debt.

According to the Journal, Siemens was prompted to explore alternatives following a change in the shareholder agreement in April that allows each partner to sound out different options for their respective stakes without fear of veto from the other. The paper noted that it is nevertheless unclear how Nokia would view a sale of all or part of NSN to buyout funds. The reports said has approached private equity companies TPG, KKR and Blackstone.

Nokia and Siemens declined to comment.

There have been persistent rumours about the future ownership of NSN, and this was further fuelled earlier this year when Siemens CFO Joe Kaeser said NSN "is not a business that we have any aspirations to stay [in]…and I do believe that 2013 will be the time for Siemens to help NSN to move to a better place."

Nokia Siemens has restructured itself to focus on mobile broadband. Concurrently, the company has been cutting jobs since 2012, though the process is now largely completed. The company has said it will cut up to total of 17,000 jobs by the end of this year, and has been jettisoning non-core units and assets. As a result, the company has bounced back to financial health: In the first quarter of 2013, NSN achieved underlying profitability for the fourth consecutive quarter and positive cash flow for the sixth consecutive quarter.

For more:
- see this WSJ article (sub. req.)
- see this Reuters article

Related Articles:
NSN lays out plans for the '5G' mobile network of 2020
Nokia Siemens closer to becoming an 'independent entity'
Nokia Siemens: Business as usual for now
Siemens CFO indicates company will exit Nokia Siemens JV

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