Nokia to sell 90% stake in luxury phone business Vertu to EQT VI
Telecom Lead Europe: Mobile major Nokia is all set to
sell its Vertu luxury-phone unit to Swedish private-equity firm EQT
Partners AB for around $250 million.
The move to sell off Vertu is a part of Nokia’s
divestment strategy and turnaround plan. The company is shedding non-core
businesses as it struggles to turnaround its core smartphone operations.
“With its strong brand, undisputed category
leadership and attractive growth outlook, Vertu fits well with EQT VI’s
investment strategy,” said Jan Stahlberg, partner at EQT Partners,
Investment Advisor to EQT VI.
England-based Vertu is known for its jewel-bedecked
mobile phones that sell for an average price of more than 5,000 euros.
The company was started by Nokia’s then-chief designer Frank Nuovo in 1998, is
the dominant player in the luxury-phone sector.
This year, Vertu’s share declined almost 40 percent.
Earlier, some reports suggested that the Finnish handset manufacturer appointed
Goldman Sachs to oversee the sale of its UK subsidiary.
“This is a logical next step in the evolution of
Vertu as the world leader in luxury mobile products. Since Vertu began in 1998,
our business has grown every year, due to the efforts of our talented workforce
and the unique products and services we offer to our customers. We believe that
EQT VI will position Vertu to continue to grow and lead in our marketplace,”
said Perry Oosting.
The transaction is expected to close during the second
half of 2012. Nokia will retain a 10 percent minority shareholding in Vertu.
Nokia also plans to reduce up to 10,000 jobs globally by
the end of 2013. The company will reduce its Devices & Services
non-IFRS operating expenses to an annualized run rate of approximately EUR 3.0
billion by the end of 2013.
Nokia has been struggling with its plunging mobile phone
market share across the globe. In smartphone segment, Nokia Lumia range hasn’t
made any significant impact.
Nokia reported 26 percent decline in net sales at EUR 7.4
billion (including Nokia devices, Nokia Siemens and location business) for
Q1 2012, against EUR 10.4 billion for Q1 2011.