Nokia Siemens has announced that the company is buying a good majority of Motorola’s Gear business that will help the company create a much needed foothold in the American mobile broadband market. The deal is said to be in all cash and is expected to completed by the end of 2010.
There are three major take-aways for Nokia Siemens – a JV between Nokia, Finland and Siemens from Germany. Firstly, this will make Nokia Siemens the largest foreign vendor of wireless gear in USA offering it the much needed economies of scale. Secondly, the acquisition will help the company in reaching out to newer customers in USA and Japan. Thirdly, the larger footprint of Nokia Siemens’ new business will bring a larger value to its business partnerships with companies like China Mobile. Sprint and Vodafone.
The news is being greeted with rise in stock prices. Motorola (NYSE:MOT) has risen more than 2.67% in the hours following the announcement. The share price is currently at $7.70.