Telecom equipment vendor Nokia Siemens Networks announced July 19 that it had agreed to pay $1.2 billion for the majority of Motorola's network equipment business in order to gain a stronger foothold in the key North American and Japanese markets.
In a joint statement
, the companies said they expect the deal to close by the end of 2010.
"I believe the addition of Motorola's networks business will significantly strengthen our worldwide presence, enhance our scale in the United States, Japan and other priority regions and reinforce our leadership position in the global wireless sector," said Nokia Siemens CEO Rajeev Suri.
Nokia Siemens, a joint venture between Finland's Nokia Corp. and Germany's Siemens AG, said it expects the transaction to strengthen its business relationships with a number of carriers including China Mobile, Sprint Nextel and Vodafone Group.
For Motorola, the deal frees it to devote more attention to the enterprise mobility unit that makes communications equipment for public safety agencies and industrial companies.
Motorola was already preparing to split into two independent, publicly traded companies in the first quarter of 2011.
Its mobile phone and television set-top box units will form one company called Motorola Mobility under the leadership of co-CEO Sanjay Jha.
The enterprise mobility and networks businesses were set to form the other company, called Motorola Solutions, to be headed by co-CEO Greg Brown.
However, with its sale of assets to Siemens, Motorola Solutions will now now consist of just enterprise mobility.
The enterprise mobility unit of Motorola which will become Motorola Solutions also focuses on bar-code scanners, RFID and other types of communications gear for industries including logistics, transportation and retail.
Brown said the sale of networks "will allow us to sharpen our strategic focus on providing mission and business critical solutions for our government, public safety, and enterprise customers."
Industry observers noted that Motorola's Enterprise mobility solutions division expects to be busy as government tech investments and public-safety demands continue to increase. Motorola said in its announcement that a drive to improve productivity, cut costs and grab advanced mobile technologies will spur sales. The company recently introduced new rugged bar code scanners and debuted its first cordless digital imager for medical enterprises.
Analysts also suggested the transaction may mark the final major consolidation move for some time. "I think we probably have reached the end of the significant (merger and acquisition) activity," said Ken Rehbehn of Yankee Group.