Can Nokia Save $2B by the End of 2013?
Mergers & Acquisitions looks at where the company stands so far in reaching its goal.
Nokia Corp. has pledged to save €1.6 billion ($2 billion) by the end of 2013, mainly by streamlining its operations as well as cutting roughly 10,000 jobs. However, raising that much cash has proven to be so difficult that the troubled cellphone maker has continued to evaluate its non-core assets for a sale, including its real estate.
Plans to sell Nokia's head office near the Finnish capital Helsinki to real estate investors for €170 million ($220 million) were announced in December, as the latest move following a year filled with massive layoffs and plant closings.
In August, Espoo, Finland-based Nokia sold Qt, a software technology business, to software firm Digia Oyj (Nasdaq: OMX; Helsinki: DIG1V) for an undisclosed price. And in June, Sweden-based private equity firm EQT announced that it purchased U.K. luxury mobile phone business Vertu Corp. from Nokia.
Nokia, which operated out of the building since 1997, has struggled in recent years due to competition from rivals like Apple Inc. (Nasdaq: AAPL), especially in the smartphone market.
Another attempt at alleviating company troubles is a shakeup of Nokia's joint venture with Siemens AG. The German services unit of Nokia Siemens Networks is set to close by the end of 2013 after a crucial contract with Deutsche Telekom failed to get extended.
The initiative, which includes plans to shed and sell product lines to focus on mobile broadband, as well as cutting up to 1,000 jobs, is expected to yield about €1 billion ($1.31 billion) in cost savings, bringing Nokia close to its goal.
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