[Data] 20 billion US dollars-who will acquire the former overlord Nokia

The lean camel is bigger than the horse. As a veteran mobile phone manufacturer, Nokia's equipment business has accumulated patents and outstanding hardware capabilities. Under the premise that it is difficult to restart the original accumulation through its own ability, the acquisition of Nokia equipment business has become an option that other companies can consider.

The news that Nokia may be sold has brought it back to the whirlpool of public opinion.

News from the "Wall Street Journal" yesterday said that the senior negotiations between Microsoft and Nokia about the acquisition of the latter's equipment business have broken down. The news revealed that the two companies had made significant progress in the negotiations, and it was only one step away from the signing of the contract, but ultimately failed due to the price and the poor market position of Nokia.

Nokia has rumors of acquisitions with multiple manufacturers, the most is Microsoft. Deducing this week's report on Microsoft and Nokia, if the negotiations between Microsoft and Nokia really break, it just proves that Microsoft and Nokia have indeed negotiated on the sale.

There are all indications that Nokia's willingness to sell is real and strong. One guess is that who will pay?

[Data] 20 billion US dollars-who will acquire the former overlord Nokia

Selling business or company?

One fact that needs to be clarified is that from the current information, if a company is interested in Nokia's acquisition, it is mainly due to its equipment business, not the entire company. In the past, most of our reports on the acquisition of Nokia by certain manufacturers have confused this point.

The "Wall Street Journal" news about Microsoft can also confirm this: "Microsoft and Nokia's advanced negotiations on the acquisition of the latter's equipment business have broken down." This means that Microsoft only cares about Nokia's equipment business, not the entire company.

From the analysis of Nokia's financial report, Nokia's overall revenue is mainly composed of three parts of business, including equipment and services, Here map business and the joint venture company Nokia Siemens Networks (hereinafter referred to as "Noxi"). Taking Nokia ’s first-quarter financial report for 2013 as an example, net revenue was US $ 7.65 billion, of which the equipment and service sector had a net revenue of US $ 3.771 billion, and HERE ’s map business had a net revenue of US $ 282 million. The equipment service sector accounts for half of Nokia's revenue. The scale of the HERE map is still relatively small.

Why should we seek to sell the main business? Over the past two years, Nokia ’s poor performance in its equipment business and tight cash flow are still the consensus of the industry, and the sale is expected to ease the overall pressure on Nokia.

Public information shows that in the past year as of December 31, 2012, Nokia's free cash flow has fallen to -812 million euros, lower than the 2.3 billion euros as of the end of September 2011. Nokia even sold the headquarters building near Helsinki, Finland, to improve its financial situation.

Over the past six quarters, Nokia has experienced a continuous decline in performance and losses. The cooperation between Nokia and Microsoft, which began in 2011, has not improved Nokia's situation, or even worse. Under the competition of Android phones such as Apple and Samsung, in the first quarter of this year, Windows Phone system phones accounted for only 3% of global smartphone shipments, and 75% of new smartphones were equipped with Android systems.

After the current CEO Stephen Allop took office, Nokia's market value fell from 30 billion euros in 2010 to 10 billion euros this spring. In the heyday of the tech bubble, Nokia's market value even reached 303 billion euros. Since Nokia announced its cooperation with Microsoft in February 2011, the company's stock price has fallen by more than 50%.

Potential buyer

The lean camel is bigger than the horse. As a veteran mobile phone manufacturer, Nokia's equipment business has accumulated patents and outstanding hardware capabilities. Under the premise that it is difficult to restart the original accumulation through its own ability, the acquisition of Nokia equipment business has become an option that other companies can consider.

If Nokia separates and sells its equipment business separately, according to Nokia's current market value of about US $ 14 billion, plus a premium of about 30%, the acquisition price of US $ 20 billion can securely secure this part of Nokia's business.

Next, a very natural question is, which companies will become Nokia's potential acquisition sellers?

In the past, Samsung, Apple, Microsoft, China ’s Lenovo, Huawei, and Nokia have all heard scandals about acquisitions, but none of them have become a reality.

If Nokia does come to the point where it needs to sell its equipment business, from the current situation, who is a potential buyer of Nokia's mobile phone business?

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