Nokia Siemens Networks (NSN) on Monday confirmed it will acquire the majority of Motorola's wireless network infrastructure business. The deal, for $1.2 billion in cash, is expected to be completed by the end of 2010 and will give Nokia Siemens, a joint venture between Nokia and Siemens AG, the No. 3 spot among wireless network infrastructure vendors in the U.S.
"Motorola's current customers will continue to get world-class support for their installed base and a clear path for transitioning to next generation technologies while employees will join an industry leader with global scale and reach," said Rajeev Suri, CEO of Nokia Siemens Networks, in a joint statement from the companies. "Nokia Siemens Networks will see the benefits of a deal that is expected to enhance profitability and cash-flow and to have significant upside potential."
Several news outlets reported the possible sale Sunday.
Nokia Siemens has been seeking a stronger foothold in North America, and especially the U.S., for some time. Last year, Nokia Siemens bid to acquire several business units of broken-up Nortel, including its wireless equipment and metro Ethernet businesses which later went to Ericsson and Ciena Corp, respectively.
Globally, NSN will move into the No. 2 position among wireless network equipment vendors, ahead of rivals Huawei and Alcatel-Lucent and behind Ericsson.
According to a statement, Nokia Siemens will gain more than 7,500 employees from Motorola, and it also expects to gain 50 customer relationships with various wireless operators.
Motorola itself is in the process of splitting into two separate companies. Its wireless networks infrastructure business includes various products and services for GSM, CDMA, WCDMA, WiMAX and LTE networks. All of it goes to Nokia Siemens with the exception of Motorola's iDEN (Integrated Digital Enhanced Network) technology business and the Motorola patents related to its wireless businesses.
"This is great news for our customers, our investors and our people and will allow us to sharpen our strategic focus on providing mission- and business-critical solutions for our government, public safety and enterprise customers," said Greg Brown, co-CEO of Motorola, in a statement.
Nokia Siemens further said that NSN and Motorola are "exploring" a joint venture related to public safety that would rely on Motorola's public safety business and NSN's commercial LTE products.