Handset manufacturer, Nokia (Espoo, Finland) and Siemens AG (Munich, Germany), an engineering company, failed to secure a deal from investors for a controlling stake in their joint venture, Nokia Siemens Networks, The Wall Street Journal reported on Sunday.
On Monday Nokia claimed there were "multiple options" for its joint venture with Siemens AG, despite reports that talks to sell a controlling stake in the venture had failed.
"Multiple options continue to exist for NSN and these are reflective of the company's performance in terms of both innovation and financial results," Nokia told Reuters in an e-mail on Monday. "We're pleased with the turnaround that NSN is executing, and we remain focused on our plans to bolster NSN's competitiveness even further."
Talks to sell a controlling stake in the venture, which is the world's No. 2 maker of wireless-networking gear, are not expected to succeed.
"Any potential investor would need to see some light at the end of the tunnel with regards to profitability for NSN," Earl Lum, chief of telecom gear industry research firm EJL Wireless, told Reuters.
"In light of the fact that the company has only recorded profitability in two quarters since 2007, we believe that investors are uncomfortable with the current valuation that Nokia and Siemens are seeking for NSN," Lum said.
Nokia and Siemens merged their telecom equipment businesses on a 50-50 ownership basis in 2007 in a six-year deal, hoping to quickly reach double-digit margins, but the venture has struggled to make a profit.
Nokia and Siemens each own half of the business, but Nokia holds four of the seven board seats. With Nokia Siemens Networks losing nearly $1 billion last year, the sale of a majority stake would have let Nokia eliminate a major drag on its financial results, the newspaper said.
Private equity firms KKR and TPG still could strike a deal that would involve them taking a small stake in Nokia Siemens, the newspaper said. The Financial Times reported earlier this month that the two private equity firms had decided against bidding for a stake in the venture after failing to agree on price and level of control.
Earlier this month, Nokia said it was in talks with "multiple parties" about its stake in Nokia Siemens Networks.
(Reporting by Jessica Hall; Editing by Leslie Adler)
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