Nokia, ING Seek Deals For Units

Name-brand companies in industries as diverse as telecommunications and financial services are struggling to do deals for major pieces of their business, as the firms continue to cope with the fallout of the global financial crisis and rapidly changing technology markets, sister news service Reuters reported.

the Finnish phone maker Nokia Corp. said it was still in talks with “multiple parties” about its stake in Nokia Siemens Networks, after a report that U.S. buyout firms had backed away from bidding for a majority stake, sister news service Reuters reported. Kohlberg Kravis Roberts & Co. and TPG Capital decided not to bid for an NSN stake, the Financial Times reported, USA!! after the firms failed to reach agreement on issues including agree on a price and level of control over the company.

“As we have said earlier, there has been unsolicited interest in NSN and we continue to be in constructive talks with multiple parties,” Nokia said in a statement. Nokia Siemens Networks was not available for comment. KKR, TPG and Siemens were also not available for comment.

Nokia, the world’s largest mobile phone maker, and German industrial group Siemens merged their telecom equipment businesses on a 50-50 ownership basis in 2007 in a six-year deal, hoping to quickly reach double-digit margins, but the venture has struggled to make a profit.

The companies said last August they had started negotiations with private equity firms to sell a stake in the telecom gear venture. The news of KKR and TPG’s withdrawal comes on the heels of Nokia CEO Stephen Elop denying rumors that the company—once the undisputed global leader in mobile phones—is for sale amid speculation that its plunging market value has made it a target.

On another front, the board of Dutch financial services group ING Group NV was expected, as Buyouts went to press, to be on the verge of a decision about a buyer for its U.S. online-banking business.

A strategic buyer, Capital One Financial Corp., was seen as the lead contender to win the ING Direct USA unit, the Wall Street Journal reported, citing people familiar with the matter. The paper also said that General Electric Co. has made a bid but that its offer is complicated by its hesitation to take on ING’s mortgage-related assets.

The paper quoted a source saying the price is expected in the “high single digit billions” but the deal could still fall apart, another bidder could appear, or GE could also return with a more attractive offer. ING needs to sell its online bank ING Direct USA and Dutch mortgage lender WestlandUtrecht Bank to comply with the European Commission conditions for state aid.

(Roberta B. Cowan is an Amsterdam-based correspondent for Reuters news service; additional reporting by the Helsinki newsroom and Abhishek Takle in Bangalore.)