Blog Post

Court Rules For Huawei, Blocks Motorola-NSN Sale For Now

On Monday evening, a judge in the U.S. District Court For Northern Illinois handed Huawei an initial victory in its fight to halt the sale of Motorola’s network business to Nokia (NYSE: NOK) Siemens Networks. Huawei alleged, in a complaint filed yesterday, that Motorola (NYSE: MOT) would be divulging confidential Huawei intellectual property if it proceeded with the transaction.

The FT reports that the judge has held up Huawei’s complaint for the moment: “Defendants Motorola, Inc., Motorola Solutions, Inc., and Motorola Mobility Holdings, Inc. (“Motorola”) are hereby ordered not to disclose any of Plaintiff’s confidential information to Defendants Nokia Siemens Networks US LLC and Nokia Siemens Networks B.V. (“NSN”),” the court said in a statement.

This will likely cause a delay to the $1.2 billion sale of Motorola’s network business assets to Nokia Siemens Networks — assets that Huawei had wanted to buy itself but lost to NSN in an auction process last year.

Yesterday, Nicholas Sweers, VP for global commuications at Motorola Solutions, told mocoNews that Motorola and NSN are still aiming to complete the deal by early 2011. That could change, though, if the court continues to support Huawei’s allegations. It could mean a longer timescale to close the deal — and potentially even a different deal if Huawei’s IP extends deeply enough into the network business assets. Or we might see Huawei try to negotiate a separate agreement with NSN to use Huawei’s IP as Motorola had done in the past.

For the full backstory on the complaint, read our post yesterday.