NSN has announced plans to acquire Motorola’s GSM, CDMA, WCDMA, LTE, and Wimax wireless assets for $1.2 billion. NSN will acquire several R&D centers as part of the deal, and approximately 7,500 Motorola employees are expected to be transferred to NSN. The companies expect to complete the acquisition by the end of 2010, subject to customary closing conditions including regulatory approval.
NSN stated a number of times during the past two years that there were still too many players in the wireless equipment industry and that its goal was to remain one of the top three players in the future.
To achieve this goal, NSN was convinced that it had to reinforce its position in the US in particular. Having historically been out of the CDMA business, NSN had a weak position in the US market despite some deals in the mobile core segment (such as an IMS deal with Verizon Wireless for its LTE project) and in the optical area.
After its failed attempt to acquire Nortel’s CDMA/LTE assets, Motorola was NSN’s last potential target to achieve this goal. Huawei and ZTE were also in the mix but NSN would have struggled to close such an acquisition for political reasons.
Globally, this deal is mostly about scale and reach. The deal also marks NSN’s entry into the CDMA business, as well as its comeback in the Wimax infrastructure market. Adding Motorola’s wireless RAN assets – which represented a turnover of $3.7 billion in 2009 – will make NSN better positioned to compete against Ericsson, Huawei, and Alcatel-Lucent.