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Nokia Siemens to snap up $1.2bn Motorola infra assets

by Sarah Griffiths on 19 July 2010, 16:55

Tags: Motorola (NYSE:MSI)

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Nokia Siemens Networks will acquire the majority of Motorola's wireless network infrastructure assets for $1.2bn in a bid to strengthen its presence in North America and Japan.

The companies expect to close the deal by the end of 2010, subject to regulatory approval.

Rajeev Suri, CEO of Nokia Siemens Networks, said the company "will see the benefits of a deal that is expected to enhance profitability and cash-flow and to have significant upside potential."

It expects to gain steady relationships with more than 50 operators as well as bolster its position with China Mobile, KDDI, Sprint, Verizon Wireless and Vodafone.

"I believe the addition of Motorola's networks business will significantly strengthen our worldwide presence, enhance our scale in the United States, Japan and other priority regions and reinforce our leadership position in the global wireless sector," said Suri.

According to The New York Times, Nokia Siemens Networks has found it hard to make a profit in the $82bn North American market which was battered by the recession. 

However, under Suri, the equal joint venture between Nokia and Siemens has started to pursue growth opportunities in a bid to steal market share from leader Ericsson. The sealing of the deal will also put Nokia Siemens Networks ahead of fast-growing competitor, Huawei of China.

Last year, Nokia Siemens reportedly failed to build its presence in North America when it lost out on acquiring the assets of a bankrupt Canadian rival, Nortel to Ericson and the Ciena Corporation. Nokia Siemens has struggled to expand its share of the North American market, with its Q1 revenues sliding 9 percent to $198.5m, which accounted for just 6 percent of the group's revenue across the globe.

Over 7,500 employees at Motorola's wireless network infrastructure business are set to transfer to Nokia Siemens Networks when the deal is closed. 

Motorola will retain its iDEN business, the patents related to its wireless network infrastructure business and other selected assets.