Nokia (NYSE: NOK) Siemens Networks has agreed to purchase most of Motorola’s telecom infrastructure unit this morning for $1.2 billion in cash.
The Finnish-based company said the acquisition will beef up the company’s global presence, particularly in Japan, but also in the U.S., where it’s had difficulties expanding. The deal includes Motorola’s CDMA business and relationships with 50 operators, but will not include Motorola’s iDEN technology used by Sprint (NYSE: S) Nextel. The companies expect to close the deal by the end of the year.
Rumors of the deal possibly occurring started popping up as recently as last week. Based on revenue, Nokia Siemens will become the No. 3 wireless infrastructure vendor in the U.S., and the largest outside vendor in Japan. Globally, it will remain No. 2. As part of the deal, Nokia Siemens will gain relationships with China Mobile, Clearwire (NSDQ: CLWR), KDDI, Sprint, Verizon Wireless and Vodafone (NYSE: VOD).
About 7,500 employees are expected to transfer to Nokia Siemens Networks from Motorola’s wireless network infrastructure business. Motorola (NYSE: MOT) retains substantially all the patents related to its wireless network infrastructure business and other selected assets. It’s immediately unclear how this could affect Motorola’s split into two companies but it could accelerate or at least make the deal easier to close.