Jabil and Nokia-Siemens in possible deal with plants on the table

September 14, 2007

Certified industry analyst Kevin Kessel with investment bank Bear Sterns recently commented on Nokia-Siemens' intention to further deepen its outsourcing relationship with Jabil Circuit and selling two Italian plants to Jabil in the process. The plant sale would include more than 600 Nokia-Siemens employees to be transferred to Jabil's payroll.

Nokia-Siemens expects to complete the transaction within the next few months.

However, there is discussion in industry the final outsourcing deal (if it occurs) may not include the sale of the two facilities to Jabil.

The two Italian production factories in question are the Cassina de Pecchi microwave plant near Milan and the Marcianise radio access equipment plant near Naples.

The European commission set October 17 as the inquiry deadline for the divesture. Meanwhile, a preliminary agreement has already been reached with European trade unions for the transfer of the 600 employees to Jabil.

In a time when several large EMS providers have experienced difficulty in getting their European operations under control plus, with the EMS industry still suffering from excess capacity, Jabil may be inclined to accept the business but leave the plants.

Jabil's telecom segment accounted for approximately 5% of total revenues in the May quarter.

Source: Bear Sterns, VentureOutsource.com