Nokia Siemens Networks is to buy most of the wireless network infrastructure assets from US firm Motorola for 1.2 billion dollars (926 million euros) to bolster its rank as number two in the sector, it said on Monday.
The German-Finnish telecom equipment company said the move would strengthen its position as world number two in the telecom infrastructure segment.
"Nokia Siemens Networks and Motorola today jointly announced that the companies have entered into an agreement under which Nokia Siemens Networks will acquire the majority of Motorola's wireless network infrastructure assets for 1.2 billion US dollars in cash," it said in a statement.
It added both firms expected to complete the deal, which still needs to obtain regulatory approvals, by the end of 2010.
Nokia Siemens Networks (NSN) said it expected the transaction "to significantly strengthen (its) presence globally, particularly in the United States and Japan."
It will gain about 50 operators which are clients of Motorola, including China Mobile, Sprint and Verizon of the US, and Britain's Vodafone.
Some 7,500 employees, including those of large research facilities in the US, China, and India, will transfer to NSN from Motorola upon completion of the transaction, the company said.
The infrastructure NSN is acquiring from Motorola includes mobile networks of second generation (GSM), third generation (CDMA and WCDMA) and fourth generation (LTE and WiMAX).
Motorola is a market leader in WiMAX, for which it has 41 contracts in 21 countries.
The Wall Street Journal said last week the two groups were in talks over Motorola's wireless assets.
The US giant had announced on July 1 its intention to split its business in the first quarter of next year, separating products for consumers from its businesses making equipment.
NSN, which said Monday's transaction would make it the number one foreign wireless vendor in Japan and strenghten its position as number two telecom infrastructure maker, is a joint venture between Nokia, the world leader in making mobile phone handsets, and the German industrial group Siemens.
It said in November it wanted to develop its activities by means of takeovers and that it was looking first at the North American market.
NSN failed in two attempts to buy divisions being sold by Canadian group Nortel which was being broken up. One of these bids was lost to Ericsson which also wants to develop in the North American market.
At about mid-day, Nokia's shares were up 1.33 percent to 6.86 euros on a Helsinki Stock Exchange up 0.34 percent, while in Frankfurt, Siemens' shares were down 0.14 percent to 74.13 euros on a market up 0.57 percent.