Nokia Siemens Networks plans to acquire the majority of Motorola's network business for $1.2 billion in a deal that is expected to significantly strengthen Nokia Siemens's global presence, particularly in the United States and Japan.
The deal could help Nokia Siemens land deals with more than 50 operators that are currently Motorola customers, including China Mobile, Clearwire, KDDI, Sprint, Verizon Wireless and Vodafone. Motorola currently has 41 WiMAX contracts, 30 active CDMA networks and more than 80 active GSM networks worldwide.
In a conference call, Nokia Siemens CEO Rajeev Suri said the company had never made a secret of its desire to expand in North America and would be able to leverage the Motorola acquisition to accomplish that.
Nokia Siemens tried to buy Nortel's CDMA and LTE networks businesses last year when they went up for sale during bankruptcy proceedings, but Ericsson ended up winning the assets with a $1.13 billion bid. The deal would have significantly strengthened Nokia Siemens' North American presence.
"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," Suri said in a statement.
About 7,500 employees are expected to transfer to Nokia Siemens from Motorola's network business when the transaction closes, including large research and development sites in the United States, China and India. The acquisition is expected to close by the end of this year and is subject to customary closing conditions and regulatory approvals.
Motorola is retaining its iDEN assets and "substantially all" of the patents related to its wireless network infrastructure business, as well as other selected assets. The company's iDEN business handles two-way radio, cellular phone, packet data and paging for customers like construction workers and public safety personnel.
Nokia Siemens and Motorola are also "exploring a global relationship in the public safety arena" that would combine Motorola's leadership in providing solutions to public safety organizations with Nokia Siemens Networks' commercial LTE solutions.