Nokia Siemens Networks, a JV between Nokia of Finland and Siemens of Germany has confirmed the purchase of Motorola’s telecom network equipment business for US$1.2bn.
The European JV had been in discussions with the US telecom equipment provider over the…
Nokia Siemens Networks, a JV between Nokia of Finland and Siemens of Germany has confirmed the purchase of Motorola’s telecom network equipment business for US$1.2bn.
The European JV had been in discussions with the US telecom equipment provider over the purchase of part of its infrastructure business, which is being spun-out of the American company.
The JV confirmed in a press release that: “Nokia Siemens Networks will acquire the majority of Motorola’s wireless network infrastructure assets for US$1.2bn in cash. The companies expect to complete closing activities by the end of 2010, subject to customary closing conditions including regulatory approvals.”
Nokia-Siemens confirmed that it will finance the deal from existing cash reserves and keep Motorola’s WiMax business as a standalone unit.
The acquisition of the Motorola unit will allow Nokia-Siemens to gain a foothold in North America and assume second position in the mobile equipment market.
Earl Lum, an analyst for EJL Wireless told Reuters: “It is a desperate attempt to gain market share in the US after the twice failed attempts to buy Nortel’s CDMA and Metro Ethernet businesses.”
“There isn’t much technology worth purchasing, and the market share for Motorola has been on a downward spiral in 2G and 3G.”
“The integration of the personnel and the manufacturing facilities and supply chain will prove to be challenging in addition to the differences in corporate cultures.”
Nokia Siemens Networks reportedly beat off competition from Chinese telecom equipment manufacturer Huawei Technologies, who are also keen to gain a beachhead in North America.
