Siemens Sells its 50% Stake in Nokia Siemens Networks
Siemens has long been looking to sell, and it had been expected that the
buyer would be a private equity investor after a partial floatation of the stake
had been ruled out.
Nokia said plans to retain the existing management and governance structure
at Nokia Siemens Networks, which is not surprising as it already had management
control of the company.
Stephen Elop, President and CEO of Nokia, commented: "With its clear
strategic focus and strong leadership team, Nokia Siemens Networks has
structurally improved its operational and financial performance. Furthermore,
Nokia Siemens Networks has established a clear leadership position in LTE, which
provides an attractive growth opportunity."
The two companies set up the joint-venture in 2007, but it has struggled in
recent years and underwent a substantial downsizing exercise last year. That
effort has however turned the company around and it is expected to turn a profit
within the year.
Nokia said that it will continue to consolidate Nokia Siemens Networks for
financial reporting purposes as well as working towards pitching the company as
an independent entity.
Nokia Siemens Networks' operational headquarters will remain in Espoo,
Finland, and the company will continue to have a strong regional presence in
Germany, including its major hub in Munich.
Nokia Siemens Networks restructuring plan remains unchanged as a result of
the change in ownership.
Nokia also confirmed that the Siemens name will be phased out, and the new
(hopefully less cumbersome) name will be announced once the deal secures
regulatory approval.
The purchase price totals EUR 1.7 billion, of which EUR 1.2 billion will be
paid in cash at the closing of the transaction. The balance of EUR 0.5 billion
will be paid in the form of a secured loan from Siemens due one year from
closing. Nokia has obtained committed bank financing for the EUR 1.2 billion
cash portion.
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