Nokia Siemens Networks and Motorola have jointly announced that the companies have entered into an agreement under which Nokia Siemens Networks will acquire the majority of Motorola’s wireless network infrastructure assets for $1.2 billion in cash.
The companies expect to complete closing activities by the end of 2010, subject to customary closing conditions including regulatory approvals.
“This is an exciting acquisition that I believe has significant benefits for customers, employees and our shareholders,” said Rajeev Suri, chief executive officer of Nokia Siemens Networks. “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. 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.”
Said Greg Brown, Co-CEO of Motorola: “Motorola is very proud of the operational and financial performance of our Networks business and its employees, who will now become a valuable addition to Nokia Siemens Networks. We are excited to have reached this agreement to combine our Networks team with such an industry leader. 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.”
As part of the transaction, Nokia Siemens Networks expects to gain incumbent relationships with more than 50 operators and to strengthen its position with China Mobile, Clearwire, KDDI, Sprint, Verizon Wireless and Vodafone.
“We are pleased to be able to add new relationships with some customers, and reinforce our position with others,” added Suri. “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.”
Commented Richard J. Lynch, executive vice president and chief technology officer of Verizon: “Verizon views today’s announcement as good news for the global wireless industry. This deal brings together two important Verizon suppliers; we look forward to our continuing work with Nokia Siemens Networks.”
Nokia Siemens Networks expects that based on revenue, with the addition of the Motorola wireless network infrastructure business, it will become the number three wireless infrastructure vendor in the United States, the number one foreign wireless vendor in Japan, and strengthen its current number two position in the global infrastructure segment.
Motorola’s networks infrastructure business provides products and services for wireless networks, including GSM, CDMA, WCDMA, WiMAX and LTE. This business is a market leader in WiMAX, with 41 contracts in 21 countries; has a strong global footprint in CDMA with 30 active networks in 22 countries; and a robust GSM installed base, with more than 80 active networks in 66 countries; and excellent traction with LTE early adopters.
Noted Bosco Novak, head of customer operations at Nokia Siemens Networks: “As customers look to transition from CDMA networks to next generation technologies, the addition of the Motorola wireless network infrastructure business is targeted to ensure that we are well placed to meet those needs. Together, we will utilise the combined strength of Nokia Siemens Networks’ TD-LTE solutions and Motorola’s WiMAX and LTE businesses, to better meet customers’ evolving technology and business needs.”
Approximately 7,500 employees are expected to transfer to Nokia Siemens Networks from Motorola’s wireless network infrastructure business when the transaction closes, including large research and development sites in the US, China and India. Motorola retains the iDEN business, substantially all the patents related to its wireless network infrastructure business and other selected assets.
The companies expect to complete closing activities by the end of 2010 and therefore do not expect the transaction to have any impact on Nokia Siemens Networks’ financial performance in 2010.
Nokia Siemens Networks and Motorola also are exploring a global relationship in the public safety arena. This relationship would combine Motorola’s leadership in providing solutions to public safety organisations with Nokia Siemens Networks’ commercial LTE solutions.