Motorola is selling wireless networks unit to Nokia Siemens
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., 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 U.S. and Japan, while enabling Motorola to devote more attention to its enterprise mobility unit, which makes communications equipment for public safety agencies and industrial companies.
“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.
Motorola said it expects about 7,500 employees in the U.S., China and India to transfer to Nokia Siemens when the deal is finalized. No layoffs are planned, Nokia Siemens Chief Executive Rajeev Suri said.
Motorola is keeping $150 million in accounts receivable. It is also retaining its integrated digital enhanced business, which makes a proprietary technology used in Sprint Nextel Corp.’s push-to-talk network. The iDEN business represents about $400 million in annual revenue, Brown said.
In addition, Motorola is hanging on to 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-Chief Executive 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. Brown said the sale of its wireless networks unit would enable his team to “further sharpen the strategic focus of our remaining Motorola Solutions business.”
