Siemens draws line under joint venture with NSN German engineering giant Siemens drew a line under its joint venture with Finnish telecom equipment maker Nokia on Monday, selling its 50-percent stake in Nokia Siemens Networks for 1.7 billion euros ($2.2 billion). Nokia shares, which have fallen sharply reflecting a decline of Nokia’s once-dominant position in making mobile phones, jumped 7.24 percent on the news. On the Frankfurt stock exchange, Siemens’ shares were the biggest gainers, adding 1.88 percent in a generally softer market. Once the deal was conclu A general view of Nokia Siemens Networks in Espoo, Finland. Photo: AFP ded in the third quarter of 2013, “Nokia Siemens Networks will become a wholly owned subsidiary of Nokia”, both companies said in a statement. Siemens’ decision to sell its stake comes as part of a strategic repositioning in the market: Siemens announced in June it would shut down its loss-making solar energy unit after failing to find a buyer. The NSN deal will allow Nokia, which has been subject to speculation it could be up for sale, to take full control of its most profitable business. Once the star performer on the Helsinki stock exchange, Nokia has seen its market value has plunge 30 percent in the past two years. The firm reported a net loss in seven of the past eight quarters amid fierce competition from Apple’s high-end iPhone and Samsung’s Galaxy. The NSN joint venture, which specialises in high-speed mobile broadband, was set up in 2007 and the partnership agreement expired in April. Nokia said NSN would retain its headquarters in Espoo, Finland and press on with its restructuring plan, which includes the closure of 16 sites in Germany, shedding 1,000 jobs. The buy-out will see Siemens receiving 1.2 billion euros in cash at the closing of the transaction, the statement added. The remaining 500 million euros will be paid through a secured loan from Siemens due one year from closing. Nokia said it had obtained bank financing for the cash portion. DZ Bank analyst jasko Terzic saw the price as a “fair” one. At one time, the two partners had mulled floating NSN on the stock exchange and since then Siemens has not made any secret of plans to pull out of the joint venture. The expiry of a shareholder pact in April cleared the way for Siemens to press ahead. A number of different scenarios have been speculated in the media, including the possible sale of Siemens’ stake to Alcatel-Lucent of France or to an investment fund. Andalys analyst Ari Hakkarainen saw the move as a way for Nokia to “get back to their starting point in 2007 when Nokia was still the biggest mobile phone company in the world.” From
Posted on: Mon, 01 Jul 2013 18:44:21 +0000
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