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Nokia Siemens Networks to sell Optical Networks business

Nokia Siemens Networks and Marlin Equity Partners announced this week that they had reached an agreement for Nokia Siemens Networks to sell its Optical Networks business unit to Marlin Equity Partners.


December 5, 2012  


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Nokia Siemens Networks and Marlin Equity Partners announced this week that they had reached an agreement for Nokia Siemens Networks to sell its Optical Networks business unit to Marlin Equity Partners.

Marlin, a Los Angeles-based private investment firm with over USD $1 billion of capital under management, has formed a new company and intends to act as a consolidator, building an industry leader in the fragmented optical networking sector.

“We are making a major commitment to this sector, and have significant capital under management that we intend to use as a catalyst for consolidation,” said Nick Kaiser, a co-founder and partner at Marlin.

Meanwhile, soon after the deal was announced Dana Cooperson, leader of Ovum’s Network Infrastructure Telecoms practice, pointed out that “when Nokia Siemens Networks announced its updated strategy about a year ago it said it was focusing its business on mobile broadband (MBB), but needed to keep its optical group as a complement.

“This struck Ovum as odd: its strongest position in optical (it’s ranked 10th globally in the US$14.9 billion market with just under US$500 million annual sales) is in the network core, where there is little connection with MBB. Furthermore, NSN’s optical business has been slipping for years with no clear plan to improve; it has not done the kind of fundamental R&D that its main competitors (e.g., Alcatel-Lucent, Ciena, Cisco Systems, Huawei Technologies) are doing.

“The details of the transaction were not released, so it is difficult to gauge Marlin’s commitment to turning the optical business around. Competition in the market is keen; margins are under constant pressure. Competitors will take advantage of this ownership change and related confusion to gain any advantage in NSN’s accounts. Marlin’s goal may be to sell the optical business to another vendor, for example Juniper Networks.

“The new optical company will be headquartered in Munich, Germany with operations around the world and will be led by its existing management team with Herbert Merz nominated as chief executive officer.

As a result of the transaction up to 1,900 employees — mainly in Germany, Portugal and China — from the optical business unit and related functions are expected to transfer to the new company in line with applicable local legal requirements. The transaction is expected to close in the first quarter of 2013.