New York: Nokia Siemens Networks is in talks with private equity firms Blackstone and Bain Capital, among others, for a potential cash infusion of at least $1 billion in exchange for an up to one-third stake in the telecom gear-maker, says a media report.
Citing people familiar with the plan, The Wall Street Journal reported that the discussions are still at the exploratory stage.
The news come just days after Nokia Siemens agreed to buy Motorola Inc’s telecom equipment unit for $1.2 billion, which is supposed to enhance the company’s attractiveness to private equity buyers.
According to the publication, Silver Lake Partners, TPG, Blackstone, Bain Capital and KKR are among the firms in contact with Nokia Siemens about a potential deal that could see private equity ownership of up to one-third of the company.
The report said that no formal proposals have been made and both sides could decide not to pursue such a deal. If the firms do make an offer, it is unclear if they would team up or go it alone.
A Nokia Siemens spokesman declined comment on the report.
Any deal would be fraught with complexity, because Nokia Siemens is a joint venture between Finland’s Nokia Corp and Germany’s Siemens AG, with each parent owning a 50% stake.
The six-year partnership ends in 2013. If a private equity firm were to take a minority stake, it would have to share control of the company with two corporate owners, whereas buyout firms usually like to exert full control.
The goal is to ready Nokia Siemens for an initial public offering in a few years, which would allow Nokia and Siemens to exit the joint venture and private-equity firms to get a return on their investment, the report said, citing people familiar with the plan.
Nokia, the world’s largest cellphone maker, and engineering giant Siemens have both considered selling their stakes in the joint venture before their 50-50 partnership ends in 2013.
Nokia Siemens, which employs about 60,000 people and recorded a $2.1 billion operating loss last year, has been a tough story to sell to private equity firms.