Siemens AG, the sprawling German engineering giant with multiple business units, is completing a “tough” fiscal year, according to a Bloomberg report.
Although none of Siemens’ business units is knocking the cover off the ball, the company’s information-technology businesses have not helped the corporate cause.
Information technology is “not a great place to be in these days,” says Joe Kaeser, Siemens’ Chief Financial Officer (CFO). He reports that Siemens will review joint ventures, including Nokia Siemens Networks (NSN), the wireless-networks business whose ownership it shares with Finland’s Nokia. Kaeser said the unit is not meeting Siemens’ performance targets.
Another Siemens joint venture is Siemens Enterprise Communications, partly owned by private-equity firm The Gores Group.
Siemens Enterprise Communications recently bid on Nortel’s enterprise business assets. Avaya submitted the highest auction bid, but the sale is being reviewed by the Canadian government. While not tendering a bid as high as Avaya’s, Siemens Enterprise Communications’ proposal offered greater benefits to Canada. Nonetheless, if Siemens’ commitment wavers to its enterprise-networks joint venture, Avaya might win the Nortel assets by default.
Earlier in the Nortel garage sale, Nokia Siemens Networks advanced the stalking-horse bid for Nortel’s wireless business. It eventually was overtaken at auction by a $1.13 billion offer from Ericsson.
Siemens has said it might have to write down the value of its stake in the unprofitable NSN. It’s possible, though not yet probable, that Siemens might want Nokia to buy out its stake in the company.
Depending on how Siemens proceeds, NSN could find itself constrained from bidding on Nortel’s LTE patents. Ericsson and RIM are thought to be at the front of that particular queue, but Nokia — a smartphone vendor as well as a purveyor of wireless-networking equipment — would have reason to consider a bid.