Tag: Nokia

Finnish Nokia agrees sale of Vertu unit to sponsor EQT Partners

Finnish mobile phone group Nokia Oyj (NYSE:NOK) said on Thursday it was selling its luxury handsets making subsidiary Vertu Corp to EQT VI fund, part of Swedish private equity firm EQT Partners AB, for an undisclosed price.

According to earlier media reports, the sale was expected to generate EUR200m, but Financial News has not been able to verify the actual price tag.

The struggling handset maker also announced that it will cut 10,000 jobs as it warned that losses of its mobile phone business will be wider than expected in the second quarter.

Nokia will keep 10% in Vertu, it said, adding that the sale to EQT VI was the next logical step in the unit’s development, helping it to focus on increased opportunities for growth in the luxury category.

EQT VI has also announced the agreement, saying it would further develop Vertu as a standalone firm through significant investments in retail expansion, marketing and product development.

Vertu’s strong brand, its leading position in its category and significant growth potential makes it a perfect fit for EQT VI’s investment strategy, Jan Stahlberg, partner at EQT Partners, said.

Vertu’s president, Perry Oosting, expressed in his comment confidence that EQT VI will position the company to continue its growth and lead the sector.

Based in Church Crookham, UK, Vertu employs around 1,000 globally. The company offers tailored, luxury services and finest design, engineering and manufacturing services. Its products sell through more than 500 stores, including over 70 own-brand boutiques, in 66 countries around the world.

Subject to regulatory clearance and other customary conditions, the transaction is expected to complete during the second half of this year, the parties said.

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UK private equity firm Permira in talks to acquire Nokia’s luxury handset brand Vertu

Finnish mobile phone maker Nokia Oyj (NYSE:NOK) has reached the advanced stage of negotiations over the sale of its luxury handset subsidiary Vertu to UK-based private equity firm Permira, as the company looks to shed non-core assets in a bid to revive its devices unit.

The Financial Times reported that the disposal is expected to generate around EUR200m (USD265m) for Nokia, which was once considered the undisputed leader on the mobile phone market, but is now struggling to make inroads into the smartphone business. Efforts also include accelerating cost reductions at the division, the newspaper said.

For Permira, a successful outcome of the talks would mean another luxury brand in its portfolio, which includes fashion labels Hugo Boss and Valentino. According to the sources, there is no certainty yet that the parties would reach an agreement. Nokia has enlisted the advisory services of Goldman Sachs (NYSE:GS). None of the companies mentioned agreed to comment to the FT.

Swedish-based private equity group EQT Partners has also held talks with Nokia over acquiring Vertu but sources familiar with the matter report that there is currently no development on that front. The FT said that some luxury goods companies had also indicated interest in buying the brand.

Vertu was set up by Nokia in 1998 and has become known as the maker of the most expensive handsets in the world. The UK-based business makes devices whose price sometimes exceeds GBP200,000. The hand-made phones with precious metal components are sold in over 60 countries. Vertu’s annual revenues are estimated at between EUR200m and EUR300m, the FT added.