NSN close to buying Motorola's network arm

Wall Street insiders claim that Nokia Siemens Networks (NSN) is only weeks away from concluding a US$1.3 billion deal to acquire Motorola's network division.

NSN is reported to be keen to purchase Motorola infrastructure business to enable it to build a stronger US customer base, and potentially gain upgrade orders from Motorola's worldwide client list that largely uses older equipment.

Motorola has previously dropped hints that it would consider bids for its network equipment arm, and NSN would strengthen its #2 position if it successfully persuades Motorola to accept its offer.

The company failed last year to acquire two of Nortel Networks' units in a bankruptcy court action, and was also reported to be in the running earlier in 2009 to buy a larger chunk of Motorola, before the US group decided to split itself into two units--handsets and networks.

Earlier rumours suggested that Motorola had received bids of around US$4 billion for its network business, although this could have been based around interest from Huawei. However, the US government was thought to have indicated its 'displeasure' to such a deal, wary about the security implications.

While neither company has commented on the possible deal, Richard Windsor, global technology specialist at Nomura, said he was not convinced NSN needed to buy the unit.

"The risk is they use it to break into the United States and start investing like crazy," he said. "If they do this transaction, it will be all about how much they should pay. The business has declining revenues but is profitable, so how much is that worth?"

Motorola's US customers include Verizon Wireless and Sprint Nextel. Outside the US the company has struggled to make significant inroads into the GSM or 3G markets.

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