Siemens says still in talks to sell NSN stake
By Marilyn Gerlach and Ritsuko Ando
FRANKFURT/HELSINKI | Mon Jun 27, 2011 5:58am EDT
(Reuters) - Siemens said it was still in talks to sell its stake in Nokia Siemens Networks, despite a report that efforts with partner Nokia to find a third shareholder in their joint venture had failed.
"Negotiations are continuing," a Siemens spokesman said On Monday, referring to attempts by Siemens and Nokia to sell a stake in NSN.
However, he declined to comment specifically on a Wall Street Journal report on Monday that both parents were now focusing on restructuring NSN and might inject more cash into their unprofitable joint venture.
"Multiple options continue to exist for NSN and these are reflective of the company's performance in terms of both innovation and financial results," Nokia told Reuters in an e-mail on Monday.
"We're pleased with the turnaround that NSN is executing, and we remain focused on our plans to bolster NSN's competitiveness even further," the company added.
NSN, the world's No. 2 maker of wireless-networking gear, declined comment.
Nokia shares were up 1.4 percent at 4.20 euros at 0945 GMT, and Siemens share were up 0.41 percent at 92.74.
The companies said last August they had started negotiations with private equity firms to unload their stakes in NSN but analysts recently said the few interested private equity firms seemed to have backed away.
Sources familiar with the matter told Reuters in May that Nokia and Siemens have allowed two private consortia to look into the NSN books. The two are The Gores Group with Platinum Equity, and TPG with Kohlberg Kravis Roberts & Co (KKR).
Nokia said on June 10 it was still in talks with "multiple parties" about its stake in Nokia Siemens Networks, after the Financial Times reported that KKR and TPG decided not to bid for an NSN stake.
"Any potential investor would need to see some light at the end of the tunnel with regards to profitability for NSN," Earl Lum, chief of telecom gear industry research firm EJL Wireless, told Reuters.
"In light of the fact that the company has only recorded profitability in two quarters since 2007, we believe that investors are uncomfortable with the current valuation that Nokia and Siemens are seeking for NSN," Lum said.
NSN has struggled to make a profit since its formation in 2007, hit by falling operator spending and Chinese rivals' cheaper products.
Chinese vendors Huawei, ZTE and market leader Ericsson have aggressively grabbed a share of the global market over the past few years.
Nokia and Siemens have been considering a listing of NSN as both look to sell some of their shareholdings.
Although Siemens and Nokia each have a 50 percent stake in NSN, which was formed in 2007, Nokia has the managerial control. Their joint venture deal ends in 2013.
Siemens, which had to book a loss last year due its 1.63-billion-euro ($2.31 billion) impairment on its NSN stake, has been pushing for an exit as chief executive Peter Loescher implements a strategy to sell non-core businesses in Europe's biggest engineering company. (Additional reporting by Tarmo Virki in Helsinki and Jessica Hall in Philadelphia; Editing by Hans-Juergen Peters)
Credit: Reuters (www.reuters.com)
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