CHICAGO - Motorola Inc. is selling its wireless networks unit to Nokia Siemens Networks for $1.2 billion in cash, a move that will accelerate the Schaumburg, Ill.-based company's planned breakup into separate businesses.
The deal, announced Monday and expected to close at the end of 2010, will boost Nokia Siemens' standing in key markets such as the United States and Japan, while allowing Motorola to devote more attention to its enterprise mobility unit, which makes communications equipment for public safety agencies and industry.
"We talked to a few different potential acquirers, but Nokia Siemens made the most sense financially, strategically and from a people and culture standpoint," Motorola co-Chief Executive Greg Brown said in an interview.
Motorola said it expects about 7,500 employees in the United States, China and India to transfer to Nokia Siemens when the deal is finalized. No layoffs are planned, Nokia Siemens CEO Rajeev Suri said in a Monday conference call.
Motorola is keeping $150 million in accounts receivable. It is also retaining its iDEN business, which makes a proprietary technology used in Sprint Nextel's push-to-talk network.
In addition, Motorola is retaining substantially all patents related to its networks business, with the deal giving Nokia Siemens a cross-license to access that intellectual property portfolio.
Motorola is in the midst of splitting into two independent, publicly traded companies in the first quarter of 2011. The mobile phone and television set-top-box units will form one company called Motorola Mobility under co-CEO Sanjay Jha. The enterprise mobility and networks businesses were to form the other company, called Motorola Solutions and headed by Brown.
Motorola Solutions now will consist of just enterprise mobility. In the conference call, Brown said the sale of networks would allow his team to "further sharpen the strategic focus of our remaining Motorola Solutions business."
The networks business was profitable in 2009, earning $366 million, even as sales dropped to $4.1 billion from $5.2 billion in 2008.
Nokia Siemens expects to retain its global No. 2 position among wireless-network infrastructure providers, while capturing the top ranking in Japan and rising to No. 3 from No. 5 in the United States. The Motorola acquisition gives Nokia Siemens a bigger presence at important U.S. carriers such as Sprint and Verizon Wireless.
