Bloomberg: Nokia to buy out Siemens?

According to a Bloomberg report, Nokia (OMXH: NOK1V, NYSE: NOK) is set to announce an acquisition of Siemens' (FWB: SIE) stake in their 50-50% telecommunications equipment joint venture Nokia Siemens Networks (NSN) as early as this morning. The companies have long been seeking ways to resolve the ownership, with Siemens wanting to be more focused on its other escapades. An aggressive cost cutting program has finally turned NSN profitable although quarter-on-quarter and cyclical swings are likely to continue. According to sources, Nokia would pay Siemens under 2 billion Euros for the stake and assume all its responsibilities.

This potential deal could be a catalyst for further moves involving NSN with a possible new owner or a spin-off among potential options. Speculation about Nokia's future direction and potential deals involving some of its divisions seem to be an almost daily occurrence in the last few weeks as analysts continue to view the sum of parts to be greater than the combined entity valuation. As an only move, Nokia would have to take on some more debt to finance the deal, further lessening room for error.

EU Commission may investigate Chinese Telco companies, Nokia-Siemens, Ericsson worried

Financial Times writes according to its sources in Brussels that the EU Commission appears ready to launch a major trade case against China concerning telecommunications equipment companies. Last year EU decided to drop such a probe despite claiming that the companies had received said subsidies in the billions when the claimant demanding the investigation withdrew its claims. This time the commission appears ready to go at it alone.

Nordic companies in the sector are Ericsson (OMX: ERIC B, NASDAQ: ERIC) and Nokia-Siemens Networks, a subsidiary of Nokia Oyj (OMX: NOK1V, NYSE: NOK) and Siemens. Both are undoubtedly worried that any action would lead to an unreasonable backlash at them by the Chinese authorities, which appears to be their normal operating model. Both do plenty of business with the Chinese. It would seem more and more countries are starting to blame each other or foreigners from all perceived ills, escalating worries of more and more protectionism or even an all out trade-war, which in turn would hurt everyone.

Nokia Siemens Networks divestments gain speed

Spanish technology holding company CN Tetragen has acquired Nokia Siemens Networks’ fixed-wireless broadband business Expedience. The assets will be operated under a new company called Nexpedience Networks. CN Tetragen gets the entire asset, active customer and supplier contact portfolio and aims to ensure the continuity of the offering.

NSN acquired the assets in the deal as a part of its deal to purchase Motorola Mobility’s public carrier wireless network infrastructure assets which was finally completed last summer. Nokia Siemens has announced a number of divestments as it weeds out non-core assets upon focusing on mobile broadband and services. Financial details of the deal weren’t disclosed.

Nokia Siemens Networks outsources to Tieto

Nokia Siemens Networks and Tieto (OMXH: TIE1V, OMXS: TIEN) have signed an outsourcing agreement for a part of NSN’s mobile network operation support Subscriber Data Management systems maintenance, technical support and R&D. Approximately 240 employees in Tampere and Espoo will transfer to Tieto as existing employees. Tieto is working towards becoming a large outsourcing provider in R&D and IT services.

NSN’s decision is in line with its ongoing global strategy review to focus on core business areas and increase efficiency. Tieto and NSN have already been working together in various things. It is implied, that the workers who are switching to Tieto would not have sufficient amount of work in their old tasks but can help Tieto by working for various company arms in R&D, software architecture and project management. The agreement is subject to Finnish competition authorities’ approval.

NSN: German and Finnish workers to be called into co-determination negotiations table shortly

Some details from planned personnel cuts of Nokia Siemens Networks surfaced today. Negotiations with the workers representatives are about to start and the company plans to cut 2900 jobs in Germany and 1200 jobs in Finland. In November the company said that the aim is to do away with 17 000 man-years of labour by the end of 2013 as a part of an effort to realize one billion in annual savings.

This time the cuts in Finland are expected to hit hardest in Espoo with 700 jobs at risk but Tampere’s number (350) appears to have come more out of the blue. Oulu is also set to lose up to 150 positions of employment. Employee representatives commented that a lot of workers are even relieved that the call for co-determination negotiations finally came, as they have felt like they have been hanging by a thread ever since the November announcement.

Normally when an organization is expecting such news, efficiency suffers. This is not much different from the wider argument made against ever stricter austerity measures demanded from a country under fiscal duress. NSN, a joint venture of Nokia Oyj (OMX: NOK1V, NYSE: NOK) and Siemens AG (FWB: SIE, NYSE: SI), has been in a continuous cycle of weak profitability followed by threat of personnel cuts since its inception in 2007. Its largest competitors are Ericsson AB (OMX: ERIC B, NASDAQ: ERIC) and Huawei Technologies Co.

Nokia Siemens Networks is focusing on mobile broadband and services. In Germany most of the cuts are expected to be from fixed networks and operations will be concentrated on fewer locations. German union is planning to protest the measures. Finnish workers have often felt that cuts in Finland are made under far less pretext as jobs cuts for efficiency reasons are much harder to push through in Germany. This time it appears that Germany will take a proportionally heavier blow as 12% of NSN’s n global workforce is in Germany and 11% in Finland.

NSN moves ahead with new strategy, divests fixed line Broadband Access business

Nokia Siemens Networks continues to focus towards mobile broadband and has reached an agreement with ADTRAN Inc. for the Huntsville, Alabama based networking and communications equipment provider to acquire Nokia Siemens Networks fixed line Broadband Access business together with associated professional services and network management solutions as well as intellectual property. ADTRAN and NSN have a long standing business relationship.

Approximately 400 employees will move to ADTRAN. The existing customer base moves to ADTRAN as well. Companies do not disclose financial details beyond the fact that ADTRAN expects the acquired business to be neutral to diluted earnings per share for the first full year and accretive thereafter. The deal is expected to close in April 2012, subject to certain conditions.

Nokia Siements Networks trying to cash in

Nokia Siemens Networks data networking and telecommunications equipment joint venture of Nokia (OMXH: NOK1V) and Siemens AG has really started to try to solve its capital issues. Investors in Nokia and Siemens have been worried that the parent companies would again need to inject capital on top of the one billion that Nokia and Siemens were forced to cough up after failing to find takers for Siemens’ portion of the company. NSN has been loss-making since its initiation in 2007.

Last week the CEO of the company announced that NSN plans to slash 17 000 jobs (nearly a quarter of the company’s total work force) by 2013, a number that far exceeded market expectations, in connection with its strategy update. NSN will focus on mobile broadband infrastructure and services. The restructuring program aims to cut costs by 1 billion Euro annually from 2013 on.

Head of German works council Gearg Nassauer said to Bloomberg, that NSN is turning itself into a takeover candidate and needs new management. Copy of CEO Rajeev Suri’s letter to NSN employees attained by Reuters said that Nokia and Siemens have provided capital "for the last time" and expects that results will now be seen. Suri went on to state that many businesses and regions have been cash flow negative since the beginning and continue to pile on losses.

NSN started shedding some of those businesses this week, as it announced the sale of former Motorola Solutions’ WiMAX business to NewNet Communication Technologies, LLC, a Skyview Capital, LLC portfolio company. Earlier markets were whispering that NSN is seeking a 1.5 billion Euro forward-starting loan to be able to renew existing credit agreements set to mature in 2012.