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.