Nokia is reportedly in talks with a private equity group called EQT in an attempt to sell off its independent subsidiary, Vertu.
Vertu is an ultra-luxury phone brand operating independently within Nokia that makes high-end phones with stainless steel, ceramics, carbon fiber. They phones even feature sapphires and rubies as buttons.
Reuters reports that the Vertu price tag is around €200 million (~$249 million).
Unnamed sources claim that the deal should go through in the next few weeks. This option seems increasingly unlikely, however as Nokia is struggling with market share and should be doing everything in its power to streamline its business. Plus, Vertu is an independent subsidiary, so separating the luxury phone maker from the Finnish super company shouldn’t prove all that complicated.
Reuters also reports that Permira, another private equity group, had been in talks to buy out Vertu but never ended up making an offer.
Vertu’s margins have to be high. It certainly doesn’t cost as much to make a phone out of premium materials as it does to buy one in the market. Still, a few developments over the past couple years make selling Vertu a rather attractive option for Nokia. For one, Ulysse Nardin went into the luxury phone business and started to dominate it. Being the number two luxury brand in anything isn’t all that wonderful. Secondly, the iPhone became a status symbol worth much more than its price tag, and so the Symbian-running Vertu brand lost value.