4 Year Old Nokia Siemens Network [NSN] To Restructure Their Joint Venture

Telecom giant Nokia and conglomerate Siemens are moving to restructure a joint venture in telecommunications networking equipment after failing to acquire a controlling stake in it and two private equity groups, Kohlberg Kravis Roberts and TPG Capital already dropped out of the auction to take over from Nokia as the controlling partner in NSN. Shares of Nokia ended Friday down 14 cents at $5.88 and shares of Siemens finished the session down 60 cents at $131.18………..


Nokia and Siemens AG have shifted their focus to restructuring their joint venture in telecommunications-networking equipment, after failing to reach a deal with bidders for a controlling stake in the unprofitable business. In the latest blow to beleaguered cellphone maker Nokia, which controls the venture, the company and Siemens now are exploring a “self-help” deal for the business, which is known as Nokia Siemens Networks. Under such a deal, each company might put more cash into the venture, the world’s No. 2 maker of wireless-networking gear. Talks to sell a controlling stake in the venture to a consortium that includes private-equity firms Gores Group LLC and Platinum Equity LLC are unlikely to go anywhere. A private-equity group that includes Kohlberg Kravis Roberts & Co. and TPG Capital dropped out of the auction earlier. Final bids were due three weeks ago. “NSN has real momentum and innovation, and shareholder interests are aligned in building a strong and profitable company,” said a Nokia spokesman, who declined further comment. Earlier this month, Nokia had said it was “in constructive talks with multiple parties.” A spokesman for Finland-based Nokia Siemens, which has more than 60,000 employees and had nearly $20 billion in revenue last year. Nokia and Siemens each owns 50% of the venture, but Nokia has four of its seven board seats. Nokia consolidates the venture’s results in its financial statements. With Nokia Siemens Networks losing nearly $1 billion last year, the sale of a majority stake could have let Nokia remove a major drag on its results. Nokia has been losing cellphone market share to Apple Inc. and devices based on Google Inc.‘s Android operating system. Nokia‘s decline has accelerated lately with its shares plunging after it warned late last month that its core handset division may not make a profit in the second quarter. Its American depositary receipts fell 2.3% to $5.88 in New York Stock Exchange trading Friday. The ADRs were trading around $8.20 when the company issued the warning.



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