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NSN spends $1.2bn on Motorola takeover
19 July 2010
Motorola co-CEO Greg Brown says selling its mobile network infrastructure business to Nokia Siemens Networks “purifies the portfolio”
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Motorola
NSN
Nokia Siemens Networks
CDMA
iDEN
Sprint Nextel
Huawei
Verizon Wireless
Nokia Siemens Networks is to take over almost all of Motorola’s wireless infrastructure business by the end of 2010 at a cost of $1.2 billion.
This is less than the $1.3 billion it was estimated NSN would pay even a few days ago (see http://www.globaltelecomsbusiness.com/Article/2630247/Search/Results/NSN-in-talks-to-buy-13bn-Motorola-arm.html?Keywords=huawei&OrderType=1 ).
Then NSN was seen as an alternative to Huawei, which was believed to have been talking to Motorola about the business.
Only the part of the operation making iDEN technology — a legacy system used by Sprint Nextel — will remain in Motorola’s control, said Greg Brown, co-CEO of Motorola, today. It is worth an annual $400 million in revenue to Motorola, he estimated. NSN will take over the CDMA operations of Motorola, with customers also including Sprint Nextel — which runs two parallel networks — and Verizon Wireless in the US.
Motorola will also hang onto almost all of its intellectual property rights, though has granted NSN a perpetual licence to use them as part of the deal, he added.
The deal affects 7,500 of Motorola’s employees, of whom 1,600 are in the Illinois area, where the group is based. “We will stay in Illinois,” said Rajiv Suri, the CEO of NSN, in a press conference today. “There is a good scale of R&D and sales.” Later in the conference he noted that there were “no planned layoffs at this point”.
The acquisition — which NSN already has finance for, according to Suri — gives the company a stronger foothold in both the US and Japan, where “we’ve been weak”, said Suri. “It’s a beautiful addition to our product portfolio.
Both leaders said they expected the deal to close by the end of 2010. Brown said that Motorola will keep the IPR because it fits with the rest of the company’s product portfolio and because “there is economic value there”.
Following the deal, Motorola is ready to split into two separate companies — one currently called Motorola Mobility which makes handsets and set-top boxes for residential use, and the other, Motorola Solutions, which focuses on public safety and enterprise equipment.
“Network solutions didn’t really below with Mobility,” said Brown in the press conference, nor with public safety or the legacy business of iDEN. “This purifies the portfolio.” GTB
GTB interviewed Greg Brown of Motorola about the future of the company in 2009:
http://www.globaltelecomsbusiness.com/Article/2224980/Search/Results/Interview-Greg-Brown-of-Motorola.html?Keywords=motorola