Siemens eyes NSN exit?
Siemens will reportedly accelerate is efforts to exit or lower its exposure to its telecoms equipment JV with Nokia, Nokia Siemens Networks (NSN).
The German company will be free to make a decision regarding NSN in April when a six year shareholder agreement comes to an end.
A person close to the company told the Financial Times that Siemens will definitely become active and not just behind the scenes, looking to cut its 50% stake to below 20%, although the source didn’t say there would be a “definite” outcome.
Siemens has appeared keen to exit the European telecoms market, which has suffered from lower operator equipment spend and competition from Huawei and ZTE.
Both Nokia and Siemens engaged in discussions to sell the company to private equity groups in 2011 but were forced to boost its balance sheet with €1 billion in equity after no deal was reached.
NSN has recently refocused its operations on mobile broadband having announced 17,000 job cuts at the end of 2011 and sold several of its assets including its optical networks, BSS and IPTV units.
The company has generated three consecutive quarters of underlying profitability leading some analysts to believe there is sufficient interest for an IPO, a trade sale or a spin-off.
The source close to Siemens told the FT that the company would ideally like a private equity investor or a consortium with a solid record in technology to take a controlling stake in NSN.
A second step could see NSN acquire ailing French equipment maker Alcatel-Lucent and form two separate companies, one mobile broadband and another IP and optical networks, the source said.
“These private equity guys could pull that off. That would probably be a very rewarding outcome and real industrial logic.”
NSN’s enterprise value is estimated at €10 billion by analysts but the source said €5 billion may be more likely.