Nokia Siemens confirms interest in new investors
Could point to private equity deal and flotation or sale in 2013
Published: 31 August, 2010
READ MORE: M&A | Nokia Siemens Networks
Nokia and Siemens have confirmed reports that they are seeking an outside investor in their wireless equipment joint venture. This could be the prelude to a stock market flotation in 2013, according to the London Financial Times, though it also reflects years of reports that both parties are dissatisfied with progress at Nokia Siemens Networks, which was created in 2006.
The existing contract between the equal stakeholders expires in 2013, when they will renegotiate their agreement. Siemens is widely expected to want to reduce its stake or even exit a business that has become non-strategic and where NSN faces increasingly intense competition from China.
However, Nokia CFO Timo Ihamuotila was downplaying any idea that its German partner would exit. He told the FT in an interview: "We are always willing to talk to those who want to bring ideas and capital to the industry", but added that both partners would stay involved "in any likely scenario".
Last month, The Wall Street Journal reported that private equity firms Silver Lake Partners, TPG, Blackstone, Bain Capital and KKR are among the firms in contact with NSN about the possible purchase of up to one-third of the firm. Any deal is expected to be worth around $1bn. The biggest interest for private equity involvement would likely be flotation, or even a trade sale. The sector has been going through a wave of consolidation recently, with Ericsson buying most of the wireless assets of the bankrupt Nortel, and NSN itself agreeing to acquire Motorola Networks.
NSN's CEO Rajeev Suri said private equity investment could give the business "greater strength and flexibility," but said fresh capital was not essential. "We're not just looking for financial investment but also for new ideas," he told the FT.
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