Motorola Solutions Inc. (MSI) is hopeful that its proposed sell of wireless infrastructure assets to Nokia Siemens Networks (NSN), a 50-50 joint venture between Nokia Corp. (NOK) and Siemens AG (SI), will be completed by June 2011. However, it did accept the fact that if the Chinese regulatory authority declined to give clearance, the deal is bound to collapse.

In July 2010, NSN entered into an agreement to purchase all of GSM, CDMA, and WCDMA technologies as well as next-generation (4G) WiMAX and LTE technologies of Motorola for a total consideration of $1.2 billion in cash. As of now, NSN received regulatory approval from the U.S., European Union, Brazil, Japan, Russia, South Africa, Taiwan, and Turkey. However, China is yet to give clearance for this merger. In January 2011, Huawei Technologies of China sued Motorola Solutions, Nokia, and Siemens, who are related to this deal.

As per Huawei, it had a 10-year agreement with Motorola for which the later sold re-branded Huawei GSM equipments since 2000. However, Huawei claimed that the agreement does not allow Motorola Solutions to sell Huawei’s patented GSM technologies to any third party. In February 2011, Huawei won a major legal battle when a U.S. federal court barred Motorola from disclosing any GSM technology to NSN that was patented by Huawei. NSN and Huawei are close competitors throughout the world. However, the judge denied to terminate the entire acquisition deal as demanded by Huawei.

The deal was initially expected to close by the end of 2010 and was viewed as a major thrust for the struggling NSN to boost its business footprint in the lucrative markets of the U.S., Japan, and the Asia-Pacific region. In late December 2010, NSN was hopeful that it will get the Chinese regulatory clearance by the first quarter of 2011. However, the Anti-Monopoly Bureau of the Ministry of Commerce in China had extended its review period by up to an additional 60 days.

In the meantime, Bloomberg reported that NSNis in the process to restructure the original deal excluding the GSM network technologies of Motorola. Consequently, the financial consideration is expected to be reduced and resettled. However, Motorola recently commented that the company so far did not get any such intimation from NSN.

 
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