Philadelphia (Reuters) - Corp. of Nokia and Siemens AG has failed to obtain an agreement for investors for a majority stake in their joint-venture unprofitable, The Wall Street Journal reported on Sunday.
The companies which could not be immediately reached for comment, are now weighing invest more money in the company, which is called Nokia Siemens Networks (DSN), the newspaper said in its electronic edition.
Talks to sell a majority stake in the company, which is the manufacturer of the No. 2 of wireless networking gear, a consortium that includes companies private-equity Gores Group LLC and Platinum Equity LLC should not succeed, said the newspaper.
"Any potential investor would need to see some light at the end of the tunnel to profitability for NSN," Earl Lum, head of Cabinet of industry gear of Telecom EJL wireless research, told Reuters.
"In light of the fact that society has registered only for profitability in two quarters since 2007, we believe that investors are uncomfortable with the current assessment that Nokia and Siemens are seeking for NSN," Lum said.
Nokia that Siemens merged their businesses of telecommunications equipment on the basis of 50-50 ownership in 2007 in a six-year contract, in the hopes of quickly reaching double-digit margins, and German industry group, but the company struggled to make a profit.
Nokia and Siemens each owns half of the company, but Nokia has four of the seven Council seats. With Nokia Siemens Networks losing almost a billion dollars last year, the sale of a majority stake would have left Nokia eliminate brake important on its financial results, said the newspaper.
Siemens was frustrated by the inability of its partner to find a solution and Siemens could take control of the joint venture, said the newspaper.
Private equity KKR and TPG companies could still strike a deal which would involve them taking a small game Nokia Siemens, said the newspaper.
The Financial Times reported earlier this month that the two private equity firms had decided against bidding for a stake in the company after failing to agree on prices and the level of control.
Earlier this month, Nokia said that it was in talks with "multiple parties" on its participation in Nokia Siemens Networks.
(Reports by Jessica Hall;) (Editing by Leslie Adler)
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