Nokia sells UK business to private equity group in global cuts
Nokia is to sell its UK-based Vertu, luxury mobile phone business, as part of major changes to its mobile business which will see 10,000 jobs go.
Nokia has agreed terms for private equity group, EQT VI to acquireVertu which is headquartered in Church Crookham, UK and employs approximately 1,000 people worldwide.
“With its strong brand, undisputed category leadership and attractive growth outlook,” said Jan Ståhlberg, Partner at EQT Partners, Investment Advisor to EQT VI.
“It is an opportunity to develop Vertu as a standalone company and we plan to drive the development of the luxury mobile phone category through significant investments in retail expansion, marketing and product development,” said Ståhlberg.
Nokia has also made significant cuts in operating expenses across its global mobile phone business which it hopes will return the struggling mobile phone company to profitable growth.
According to Stephen Elop, Nokia president and CEO, the company continues to be committed to its Lumia smartphone range and location-based services.
“However, we must re-shape our operating model and ensure that we create a structure that can support our competitive ambitions,” said Elop.
As a result of the planned changes announced today, Nokia plans to reduce up to 10,000 positions globally by the end of 2013.
Nokia is beginning the process of engaging with employee representatives in accordance with country-specific legal requirements.
“These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia’s long-term competitive strength,” said Elop.
According to analyst IHS, Nokia recently lost its crown as the world’s number-one mobile handset vendor.
“It is struggling to gain a foothold in the fierce competitive smartphone market, where it faces rivals such as Apple’s iPhone and a raft of successful devices based on Google’s Android operating system (OS) from strong Asian vendors such as Samsung and HTC,” said IHS.
Nokia made the decision early last year to begin phasing out its in-house Symbian platform in its smartphones in favour of Microsoft’s Window Phone OS, and has launched its Lumia range of handsets
Nokia also said it will acquire imaging technology for Sweden-based Scalado, which currently has imaging technology on more than 1 billion devices.
Vertu’s business is in high end smartphones and tailored services.
“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, President of Vertu.
Vertu The transaction, the terms of which are confidential, is expected to close during the second half of 2012, subject to customary regulatory approvals and closing conditions. Nokia will retain a 10% minority shareholding in Vertu.