For Nokia Siemens Joint Venture, an IPO Down the Line?
To date, however, the networking giant has struggled to turn a profit since Nokia (NOK) and Siemens (SI) paired up three years ago to form the joint-venture with equal ownership. The parties were hoping to achieve fatter double-digit profit margins under the six-year deal, but that's remained elusive, according to the report.
Although Nokia Siemens has not yet become a profit machine, that hasn't held it back from engaging in billion-dollar buyout deals. Over the summer, Nokia Siemens said it would buy a significant portion of Motorola's wireless networking equipment for $1.2 billion.
Networking equipment doesn't come cheap and that, in part, has put a damper on Nokia Siemens efforts to be profitable. The telecom and networking industries are capital-intensive, requiring industry players to spend big bucks. So, seeking private equity investors is a logical, though obviously difficult, strategy.