Nokia reportedly buying Siemen’s stake in NSN for 2.6 billion USD

| June 30, 2013 | 51 Replies

 

NSN_Logo

Someone went shopping this weekend. Nokia has apparently agreed to buy the Siemen’s 50% share of NSN for a reported 2.6 billion USD. How is Nokia going to afford this? With a bridge loan apparently. Perhaps Nokia are seeing more positive future potential in NSN.

http://www.bloomberg.com/news/2013-06-30/nokia-said-to-agree-to-buy-siemens-stake-in-nsn-networks-venture.html

http://www.hs.fi/talous/Nokia+ostaa+Siemensin+osuuden+yhteisest%C3%A4+verkkoyhti%C3%B6st%C3%A4/a1372557521459

It’s an interesting result, given that some expected Nokia to sell its share of NSN.

Cheers dietyyli for the tip!

Category: Nokia

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  • muerte

    This is huge news, if the price is correct. Good luck shareholders!

  • SmoledMan

    So Nokia has no cash left and they do this? This is the end folks.

    • muerte

      Far from it.

    • v.s.i

      Sure, see you on July 11th at the NY announcement. Don’t bother visiting a blog for a dead company until then.

    • flyingbathtub

      right. no cash left. absolutely no cash….

      Total Cash (mrq): 13.51B
      Total Debt (mrq): 7.28B

      only I wished that I have no cash too!!!

      • ABC

        Hah :D

      • tiyo xi

        what is meaning of flying bath tub ? Are you sitting in one ?

    • arts

      Is that how the goalpost moves?

      Last time it was dead sure Nokia is sold, now its this? :p

  • jtanigawa

    GO NOKIA! GO BIG OR GO HOME!!!

  • xconomicron

    Knew it…I think it was a wise decision seeing that NSN had started becoming profitable in the last year due to the LTE switching and the cut costs it had made prior.

    This is good news!

  • benam badshah

    So this is what the emergency board meeting was all about. Isn’t 2.6B a little too cheap :)

    • twig

      Sounds like it but S may have a margin call so to speak.

    • benam badshah

      please explain…

    • Viipottaja

      Yup… told ya. Well not you, but.. :)

      • Janne

        While other options were (and still are, anything is possible) theoretically possible, the NSN case was the most logical and likely one for the board meeting – since it was public knowledge that Siemens was looking to sell. Unfortunately the whole media (and the naysayers) didn’t approach this with rationale, they went with scandal headlines instead.

        Remember the Joe Belfiore headlines?

        Pure insanity, the media response to this. Joe Belfiore, for crying out loud.

        That said, I don’t doubt Nokia being the target of acquisitions or maker of divestments is possible. It’s just that clearly the board meeting and Joe Belfiore had nothing to do with such.

  • Diazene

    great news

    BTW Siemens had only 49.9%

  • twig

    A recent article that the U.S. Military wants a separate secure 4G network may prove Nokia correct, as Governments and corporations will follow with their own secure networks built by…..

  • ummNo

    _bridge loan_

    Bye bye Nokia Smartphones, welcome MS Smartphones? ;)

    • twig

      Sammie takes a huge hit on smartphone sale estimates!! Bye,bye Sammie!!😃😃😃 That makes me sooo sad. On Bloomberg.

      • twig

        Let me be the first the say, wha,wha,wha.

        😎

    • Viipottaja

      ummmNo. I assume you think corporations only use their cash for things like this?

      • tiyo xi

        i can bet , its preplaned by elop to make nokia weak and fall so that microsoft can buy it for less money from the previous deal talk between nokia and ms

        • KeiZka

          So How Much are you getting from all that trolling?

  • benam badshah

    How did Siemens sell it for 2.6B when the total cash of NSN itself was supposedly more than 5B USD.

  • twig

    Sammie Galaxy 4 sales disappointed shareholders as est. are cut. Buyers finding little reason to upgrade! JP cuts forecasts. Other Androids at one eight the price are stealing sales !! Just on Bloomberg.

  • Just Visiting

    Well, the writing was on the wall when Hauwei was showing ‘interest’ in Nokia; I’m sure Nokia already knew, but if they didn’t, the red flag to Nokia that they had a fantastic asset in NSN, should have been made apparent when Hauwei started commenting on Nokia.

  • Viipottaja

    Interesting stuff in that Helsingin Sanomat article. NSN will sell, according to a plan seen by the paper, all its factories to bidders, which include Foxconn, Flextronics, Sanmina-SCI and Jabil; Nokia picks two winners. The factories are sold in two packages, one that includes Oulu and Chennai, another with 4 factories in China. The buyers would continue building the NSN equipment, but NSN itself would not own factories anymore. According to one estimate, NSN could get EUR500-600 for the factories.

    • Bloob

      Well, that’s cheap.

    • jiipee

      Selling the manufacturing is a bold move, though logical since a lot of other businesses have done it earlier.

      What is quite alarming is Nokia’s cash position. A company needs cash for operations and it is estimated that Nokia’s net cash position has junk by 800 mio during the last 3 month: http://www.kauppalehti.fi/5/i/mobiili/kl_mobiili/uutinen.jsp?oid=201307451803&ext=nwnd

      If the WP devices finally start to make profit in 2013 nad networks continues well, this is great stuff.

      The worse scenario is that this is in fact plan B. If the handset business keeps on making losses, it will be sold to fund the network business.

      • jiipee

        Hmm, that was a wrong link and cannot find the one I looked with my phone. Maybe it was old info. Based on the actual release the net cash position has decreased by 300-800 mio.

        If they get to sell the manufacturing fast and have IPO to list NSN, they might be in a very good position.

        Looking at the sales price, the profit expectation for future have to be lower than what NSN has achieved during the last year. Otherwise the price makes no sense.

        • Bloob

          Companies don’t operate on net cash, many actually have negative net cash.

  • anon2

    Ahh, so that’s what last week’s board meeting was about; I honestly thought Nokia was ready to sell the company to Microsoft.
    This purchase may not seem like a value proposition at the moment, but it definitely puts Nokia in a good position to take advantage of the lucrative infrastructure business. In my opinion, this industry will experience phenomenal growth over the coming years as outdated copper wire is replaced with high-speed fiber-optical cable.

  • n8thebest

    Yes, awesome news!

    This is a joyful moment for Nokia fans! All the Nokia fans that had faith the company would pull through and become a strong player in the world market again are now seeing this become a reality!

    This is most excellent, especially with the radical and groundbreaking innovations NSN recently came up with for base stations, as well as NSN’s strong reputation for reliable and secure equipment.

  • sf

    This is good if true. Some analysts believes total market cap of NSN is approx $9billion. And if Nokia is getting Siemens’ stake for $2.6billion then this is absolutely great. Yes, Nokia can afford it. They just cant let NSN go off their hands. I wonder what happened to that Solidium’s involvement in this.

    • sf

      Ok just read the Bloomberg article. What is this ‘bridge loan’ thing they are talking about?

      • jiipee

        Siemens loans Nokia 5 mio to be payed back within a year.

  • chetan

    Aaaah.after selling many thing they are about to buy something…..very good

  • ms.nokia

    Awesome, i said it before, if Nokia wants to discourage take-over bids then buying NSN would be the way to go,
    Now Nokia is too complicated and expensive for anyone to buy :)

    it’s the oldest trick, put your company in debt and the buyers will disappear. (but make sure the company can survive, which is certainly the case with Nokia)

    • jiipee

      I would think that the opposite is true. Nokia’s business is now more tranparent and easier to split for a possible bidder since they dont need to negotiate with Siemens.

      • ms.nokia

        true a bidder won’t have to deal with Siemens, but a bidder will have to figure out what to do with the whole NSN company now that Nokia bought it, and no chance to float NSN with Siemens anymore, any IPO of NSN will have to be financed/structured by the bidder alone.

        Nokia’s net cash reserves are nearly halved from the purchase which makes it less attractive to a bidder, but Nokia does get access to the cash reserves NSN has.

        • jiipee

          “true a bidder won’t have to deal with Siemens, but a bidder will have to figure out what to do with the whole NSN company now that Nokia bought it, and no chance to float NSN with Siemens anymore, any IPO of NSN will have to be financed/structured by the bidder alone.”
          I dont see how that is more difficult than dealing with the same issues with Siemens. There is always the option to sell the whole operation to huawei/ZTE, who must be more interested without Siemens owning 50%.

          The fact about net cash is very true, it makes it even less attractive that it was. My friend working for Nokia finance must be even more busy now, since he needs to find cash from already difficult market to finance the daily operations for a company having a low credit rating.

          I hope that this tells that the handset business has started to gain positive momentum and Nokia is now sure that they can finance this.

          • ms.nokia

            Siemens was a very motivated seller of NSN, it would have been easier for a bidder to buy NSN when Siemens owned half, and maybe Siemens would have gotten more than what Nokia paid.

            but my main point was that Nokia is now less attractive to buy since it has less cash and more responsibilities as it owns all of NSN, and any bidder will not have Siemens to help them offload NSN.

  • SLAYER

    great news!

    the source says 2.2B, which one is the correct figure?

  • Shivu

    look here at the nokia market place icon in this image (does it mean that nokia will have many new apps under nokia market place)

    http://img6.flixcart.com/image/mobile/y/h/t/nokia-lumia-820-400×400-imadjntvjzvyycp7.jpeg

  • JGrove

    And out of the hole they go.

    When Sony bought out Ericsson’s share, and restructured, its been all roses since. With Nokia not having Seimens to gum up any plans or tech with there own tech, they can make even more progress in networks

  • Damen

    I believe this is just the beginning of Nokia’s transformation. I expect them to soon divest some of their assets as well.