Nokia Siemens Networks is talking to several private-equity firms about potentially selling a stake in the company, according to a report in the Wall Street Journal, which cited unnamed sources familiar with the matter.
The report said that NSN, a joint venture between Finland's Nokia and Germany's Siemens, is holding preliminary talks on the topic. Silver Lake Partners, TPG, Blackstone, Bain Capital and KKR are among the firms NSN is talking to, and the deal could see a buyout firm owning up to one-third of the equipment vendor. News of the talks comes shorty after NSN agreed to acquire Motorola's (NYSE:MOT) wireless networks business for $1.2 billion--a move that strengthens NSN's position in North America and Japan and which the report said was a bid to enhance NSN's attractiveness to potential partners.
Importantly, no formal proposals have been made and all of the parties could walk away without any deal being reached. The goal of a potential buyout is to get NSN ready for an initial public offering in a few years, the report said, which would allow the parent companies to exit. A Nokia Siemens spokeswoman declined to comment.
The partnership between Nokia and Siemens is set to last until 2013. However, a separate recent Journal report painted a picture of a strained relationship between Nokia and Siemens over the joint venture. That report said that both Nokia and Siemens have recently entertained the idea of exiting the venture.
Despite the recent high-profile Motorola win, as well as a deal with Harbinger Capital partners to provide and manage the private-equity firm's LightSquared wholesale LTE network, things have not been smooth of late for NSN. The company posted a $2.08 billion operating loss in 2009, and Nokia said in its second-quarter earnings statement that NSN will maintain its market share in 2010 rather than grow faster than the market in 2010.
- see this WSJ article (sub. req.)
Harbinger forges $7B LTE pact with Nokia Siemens
Nokia's Q2 profit sinks 40% as pressure mounts
NSN snags Motorola's wireless networks unit for $1.2B