The owners of European vendor Nokia Siemens Networks (NSN) have failed to find an outside investor. NSN confirmed that Nokia and Siemens will keep the struggling networks JV after a nearly year-long attempt to sell a majority stake in the business.
NSN…
The owners of European vendor Nokia Siemens Networks (NSN) have failed to find an outside investor. NSN confirmed that Nokia and Siemens will keep the struggling networks JV after a nearly year-long attempt to sell a majority stake in the business.
NSN had first confirmed PE interest in August 2010, and companies including Blackstone, TPG, KKR and Gores Group had been rumoured to be interested. French vendor Alcatel-Lucent and South Korea’s Samsung have also been in the frame for the JV
Morgan Stanley advised on the sale and earlier in the year it had been reported that the sellers expected to receive around US$2bn in return for a 51% stake in NSN.
But in June KKR and TPG decided not to make a bid for a stake in the joint venture reportedly because they were unhappy with the price and level of control they were being offered.
Soon after rumours surfaced that talks with the last remaining bidder, a PE consortium including Gores and Platinum, were also about to collapse because of concerns over NSN’s profitability.
Network equipment companies like NSN or Alcatel-Lucent have come under increased pressure from Asian competitors over the past years, while companies like Swedish Ericsson has announced a diversification strategy to tackle the threat from cheaper suppliers.
NSN said it has made good progress in its turnaround plan, with first quarter 2011 results marking a third successive quarter of year-on-year reported net sales growth, as well as a fifth quarter of non-IFRS operating profits since it announced its change in strategy in November 2009.
