By Gustav Sandstrom Of DOW JONES NEWSWIRES Telecom equipment vendor Nokia Siemens Networks said Monday it has agreed to pay $1.2 billion for the majority of U.S.-based Motorola Inc's (MOT) network equipment business in order to gain a stronger foothold in the important 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," Nokia Siemens Chief Executive Rajeev Suri said. Nokia Siemens, a joint venture between Finland's Nokia Corp. (NOK) and Germany's Siemens AG (SI) said it expects the transaction will strengthen its business relationships with a number of telecom operators including China Mobile Ltd. (CHL), Sprint Nextel Corp. (S) and Vodafone Group PLC (VOD). As a result of the deal, Nokia Siemens expects to become the largest foreign wireless gear vendor in Japan, the third-largest in the United States, and to strengthen its number two position in the global infrastructure segment. Sweden's Telefon AB L.M. Ericsson is currently the world's largest network equipment vendor, ahead of Nokia Siemens, Paris-based Alcatel-Lucent (ALU), and China's Huawei Technologies Co. Approximately 7,500 employees are expected to transfer to Nokia Siemens Networks from Motorola's wireless network infrastructure business when the transaction closes, the companies said. Motorola's decision to break up the company through the sale of its network equipment business was demanded by activist investor Carl Icahn and aims to increase the company's market value. The company hopes it will force analysts to assess the cellphone and cable set-top boxes businesses separately from the remainder of the company, which makes public-safety equipment and handheld scanners. Nokia Siemens has made no secret of its ambitions to enter the U.S. market. Last year, it bid for two units of bankrupt Nortel Networks Corp., only to lose the bulk of the wireless-equipment business to Sweden-based market leader Telefon AB L.M. Ericsson (ERIC) and Nortel's metro ethernet unit to U.S.-based Ciena Corp. (CIEN). At 1114 GMT, shares in parent company Nokia were up 1.8% at EUR6.89, against a 0.5% rise in the wider Helsinki market. -By Gustav Sandstrom, Dow Jones Newswires; +46-8-5451-3099; gustav.sandstrom@dowjones.com
