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Nokia Siemens Buys Motorola Unit for $1.2 Billion

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Quote:

Nokia Siemens Networks said Monday that it would buy Motorola’s telecommunications network equipment business for $1.2 billion, a move that gives it a stronghold in the North American market and the No. 2 position in the cutthroat mobile gear market.

Nokia Siemens Networks — a 50-50 joint venture of Nokia and Siemens — has struggled to make a profit in the $82 billion market, which was hit hard by the recession.

Under its chief executive, Rajeev Suri, the venture has started to seek growth opportunities more aggressively and fight back against the Ericsson, the market leader, as well as Huawei of China. The Motorola deal will help the venture overtake Huawei.

Nokia Siemens tried to build a position in North America through an acquisition last year, but lost out on two auctions of assets from Nortel, its bankrupt Canadian rival: first to Ericsson and then to the Ciena Corporation.

Both companies paid 0.57 times annual revenues for the Nortel business units. Nokia Siemens is paying 0.32 times annual revenues for the Motorola business.

Nokia Siemens has struggled to take a larger share of North American business on its own; its revenue from North America shrank 9 percent in the first quarter to 153 million euros ($198.5 million), amounting to just 6 percent of the group’s total.

http://www.nytimes.com/2010/07/20/te...okia.html?_r=1