Nokia Siemens Networks plans to buy a significant portion of Motorola's wireless network equipment assets for $1.2 billion cash, the companies announced Monday. The joint-venture of Nokia (NOK) and Siemens (SI) will push the venture into the No. 3 spot in the U.S. for wireless equipment companies and give Motorola's (MOT) effort to split into two companies a strong head start.
With the Motorola assets, Nokia Siemens expects to also bolster its presence in Japan, gain relationships with more than 50 operators that previously worked with Motorola, and expand its code-division multiple access (CDMA) footprint with Motorola's CDMA products.
"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," the company's CEO Rajeev Suri said in a statement.
Back in February, Motorola announced plans to break its company into two, with its struggling mobile handset and cable set-top box television division as one company and its networking equipment division as another.
Under the deal, Motorola's equipment division will still retain its iDEN business and substantially all the patents related to its wireless network infrastructure business, as well as other selected assets, according to Nokia Siemens.
"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," Greg Brown, co-CEO of Motorola, said in a statement.
The transaction is expected to close by the end of this year.
Nokia Siemens to Buy Motorola Unit for $1.2 Billion