Nokia Siemens Has Received Private Equity Interest
Nokia Siemens Networks CEO Rajeev Suri
Nokia Siemens Networks via Bloomberg
Nokia Siemens Networks Chief Executive Officer Rajeev Suri.
Nokia Siemens Networks Chief Executive Officer Rajeev Suri. Source: Nokia Siemens Networks via Bloomberg
Nokia Siemens Networks, the world’s second-largest maker of wireless networks, said it was contacted by private equity companies interested in buying a stake.
“This is unsolicited,” Chief Executive Officer Rajeev Suri said today in an interview at a conference in Santander, Spain. “We don’t need capital. We don’t need to do a deal with private equity. But, we would look at it. It can give us some strategic flexibility. We look forward not just to capital, but also to good ideas.”
Nokia Siemens, the 50-50 joint venture between Nokia Oyj and Siemens AG, has struggled to stay profitable as it merged the parents’ wireless network assets. It agreed in July to buy Motorola Inc.’s wireless networks business to compete with market leader Ericsson AB, China’s Huawei Technologies Co., and Paris-based Alcatel-Lucent SA in North America and Asia.
“I expect that in any likely scenario Nokia and Siemens will continue to hold a majority of Nokia Siemens Networks,” Suri said. The initial joint-venture accord expires in 2013.
The approaches by private equity firms are “a relatively recent development; we’re not talking months and months ago,” Ben Roome, a spokesman for Espoo, Finland-based Nokia Siemens said today, confirming a report in the Financial Times yesterday. He said “a handful” of companies showed unsolicited interest, declining to provide details.
Blackstone Group LP, TPG, Silver Lake Partners and Bain Capital LLC, are among investors seen as being interested, the Financial Times reported.
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“There are a number of private equity companies out there that have deep telecommunications infrastructure knowledge,” Suri said, declining to say who has approached Nokia Siemens.
The discussions with private equity are not related to the Motorola deal, Suri said, reiterating that the assets will be acquired with money the company already has and financing that was already in place.
“We are taking market share in the areas that matter: mobile broadband, managed services, and subscriber-centric solutions,” Suri said, citing a report from market researchers Dell’Oro which said Nokia Siemens regained the number two position in the market before the Motorola deal after slipping earlier. “There’s a turnaround.”
The Motorola deal supports the company’s plan to focus on six large markets including the U.S. and Japan, he said.
“We certainly feel it’s a demonstration of the progress the company is making that we are seen as an investment opportunity,” Roome said of the private equity approaches.
In July, Nokia Siemens reported an operating loss in the second quarter of 179 million euros, roughly the same as the year-earlier period. Nokia said the unit will maintain its market share in 2010.
To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net; Paul Tobin at ptobin@bloomberg.net
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