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Nokia Siemens Networks is known to be the second largest manufacturer of the wireless phone systems worldwide in the mobile industry. This company has indicated that it would pay nearly $1.2 billion in purchase of wireless network assets currently owned by the Motorola Inc. as a strategic action to expand Japan and North America. This will be a joint venture of Siemens AG and Nokia Oyj which will gain and/or expand access to more than fifty customers. The company will pay for all the assets without any debt using cash and credit facility that it had secured earlier. This deal is exclusive of $150 million in cash, some extra assets and accounts receivable that Motorola Company will keep.

The Nokia Siemens Networks which is based in Espoo, Finland is ready to advance its existence in North America in an attempt to compete well with big rival Ericsson AB and also the competitors who are growing fast which include China’s Huawei Technologies Company. This company has unsuccessfully bid twice for the assets that belonged to Nortel Networks Corp which is based in Toronto. This is because the telecommunications-equipment maker had sold off units and filed a bankruptcy protection.

The Nokia Siemens will be the strongest telecoms market once it has established itself in North America over the medium term. There is a market performance rating on Nokia whereas there is outperformance rating on Motorola. Nokia had declined by 0.1% at the end of Helsinki trading to 6.77 Euros whereas Siemens had slipped by 1.4% to 73.23 Euros especially in Frankfurt. Motorola increased by 5.6% to $7.92 in New York. Nokia Siemens will add more than 7500 employees through enhancing the deal. This will decrease the cutting down of jobs and the shutting of offices due to falling demand and also price competition especially from Huawei and Ericsson.

Nokia Siemens will strengthen the external ties it has to operators such as KDDI in Japan, Sprint Nextel Corporation and Verizon Wireless in the U.S., China Mobile and finally Vodafone Group Plc. These also include the technological segment of the Nokia Siemens. The Nokia Siemens wireless business is rooted in the standards of GSM which is widely used by carriers outside United States and in East Asia. Motorola on the other hand sells the GSM systems and CDMA widely used in North America and East Asia. There are also the WIMAX and LTE technologies that Nokia Siemens deals with.

Code: Sample20

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