HELSINKI (Reuters) - Struggling telecom network equipment maker Nokia Siemens Networks has agreed to sell its fixed-line Broadband Access business unit to U.S. firm Adtran as part of a revamp of its operations.
The sale is one of the first divestments for loss-making NSN since it announced plans last month to sell units and axe 17,000 jobs, nearly a quarter of its workforce.
The price of the deal — including intellectual property, technology and existing customer base — was not disclosed.
Shares in U.S.-listed Adtran dropped 6.7 percent by 1756 GMT, while those of part-owner Nokia were down 3.3 percent in a weak Helsinki market.
The companies said in a joint statement the deal was expected to close by the end of April 2012 and some 400 NSN employees would transfer to Adtran.
“This is definitely a step in the right direction and therefore slightly positive for (Nokia) share,” Nordea analyst Sami Sarkamies said in a note.
“The more NSN is able to sell, the less cost cuts and related restructuring costs will be needed.”
Adtran said the acquired business would be neutral to diluted earnings per share for the first full year after the deal closed and accretive thereafter, and boost annual sales in the first year after the deal closes by between $140 million and $180 million.
Adtran’s sales rose 23 percent in January-September to $541.9 million, with net profit rising 38 percent from a year ago to $107 million.
NSN, which has struggled to make a profit since being set up in 2007, was formed by Nokia and German conglomerate Siemens in the hope of building enough scale to lead an industry dominated by Sweden’s Ericsson and, increasingly, by Chinese entrants.
It has faced aggressive pricing from rivals and an economic downturn that has forced telecom companies to cut spending.
Reporting By Tarmo Virki; Editing by Helen Massy-Beresford and David Hulmes