Nokia and Siemens Increase Talks to Secure Future of NSN Joint Venture
Siemens is pushing Nokia to find a solution to their six-year old Nokia Siemens Networks joint-venture so that it can sell its 50% stake in the company.
The joint-venture is due to expire in April and the two co-owners need to agree on a renewal or exit policy by then.
Citing three people familiar with the situation, Bloomberg News reported that Nokia has held talks that could see it buy out Siemens from the company, but then merge the assets with Alcatel-Lucent to form a new larger network infrastructure vendor.
Talks with Alcatel-Lucent may now however be hampered by the announcement yesterday that its CEO, Ben Verwaayen is to resign from the company.
It is however also unlikely that Nokia would be able to buy out Siemens and keep sole ownership of the company, as the venture has a market value of around US$13 billion.
In addition to seeking a possible merger with another vendor, the two shareholders have long been looking for an outside investor to take a stake in the company as a prelude to a stock-market floatation.
It had been previously reported that Silver Lake Partners, TPG,Blackstone, Bain Capital and KKR were in talks about taking a one-third stake in the company -- but the talks apparently broke down last year.
Although Nokia and Siemens own equal stakes in the company, its liabilities are consolidated in Nokia's results as it has effective management control of the subsidiary. A sale of a stake, or merger that reduces its management control would allow Nokia to divest itself of the financial liabilities and bolster its own financial position.
On the web: Bloomberg News