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back to article Buh-bye Siemens: Nokia to splash €1.7bn turning NSN into N

Nokia is buying out its network partner Siemens, for €1.2bn in cash plus a half-a-billion loan, putting the Finnish firm in sole control of the infrastructure business. Ownership of Nokia Siemens Networks (NSN) is split equally between the companies, and managed to turn a thin profit last year following repeated rounds of cost- …

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Anonymous Coward

1.7bn?

Considering their cash at the end of last year was apparently 3.6 billion euros. That's over half of their cash reserves to buy the company. That only (hah only) leaves them with 1.9bn euros.

By last accounts they were also losing around 500 million euros each year.

Is this just the part of a financial strategy game where you realized you're losing so you spend all your money in an attempt to get game over faster? Because really I can't see things going up from here, unless of course they're just lowering the value of the company so Microsoft can buy them for cheaper.

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@ AC 1451h - Re: 1.7bn?

Because really I can't see things going up from here, unless of course they're just lowering the value of the company so Microsoft can buy them for cheaper.

I can't see anything wrong in spending some money on the parts of the company that earns and surely it doesn't drop the value of the company as a whole. Maybe they're thinking of dropping out of the handset market altogether (Siemens did that 10 years ago, and most likely would not be interested in having a new handset presence, so maybe offering it to MS?) and just do what brings in some dosh.

So, maybe a 3-way swap. Get rid of the unprofitable part, and gain full control of the profitable sector?

Makes sense to me . . .

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Anonymous Coward

Re: 1.7bn?

"Because really I can't see things going up from here, unless of course they're just lowering the value of the company so Microsoft can buy them for cheaper."

Well the Lumia phones are increasing market share rapidly, and they havnt even launched the top of the range EOS yet.. As are the low end Asha handsets - so likely they will be making a profit on mobile again this year. Then you have $10 billion worth of patents and licensing. Then you have the mapping division....and now the full NSN too....

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Anonymous Coward

Re: 1.7bn?

"Considering their cash at the end of last year was apparently 3.6 billion euros"

Net Cash != Available Cash....They have lots of cash.

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Net Cash != Available Cash...

Is it not?

Gross Cash is the value of their assets. Assuming they are paying fair price, their Gross Cash remains unchanged because they spend money to get the equivalent value in NSN.

They have a net cash of between EUR 3.7 billion - EUR 4.2 billion and if they transaction is approved that will got down by 1.7 billion.

That's what Nokia is saying anyway...

At the current burn rate, they still haven enough cash to last the remainder of the year.

They just took a loan of 2.2 billion.

NSN had a bid to buy the Wireless division of Nortel for $650 million but Ericsson snatched it for just over a billion. It was still a steal and NSN looked cash strapped at the time.

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Never got the reasoning behind this 'marriage'...

"Synergy" - as many merged companies have discovered - seems to be a very expensive word that means nothing.

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Anonymous Coward

Re: Never got the reasoning behind this 'marriage'...

IIRC, Nokia was looking to buy someone to make their networks division bigger, and Siemens was looking to sell but insisted on throwing in some parts of the business that Nokia did not want, so a JV was formed instead.

The synergy *can* be made to work, but I agree that for many merged companies, it doesn't.

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Fissiparous...

Er...Linux?

(now I'll get tol to 'fork off!' )

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