Motorola-NSN deal delayed by Chinese regulators

By Wailin Wong
Posted March 9 at 9:56 a.m.

Chinese anti-trust regulators have extended their timeframe for reviewing Schaumburg-based Motorola Solutions Inc.’s planned sale of its networks business to Nokia Siemens Networks.

Motorola and NSN announced the $1.2 billion deal in July 2010 and the companies expected to close the deal by the end of 2010, but this deadline was delayed pending approval from the Chinese Ministry of Commerce’s Anti-Monopoly Bureau. The companies then targeted the first quarter of 2011 for closing the transaction, and Motorola had affirmed this timeframe as recently as two weeks ago.

However, Motorola said Wednesday that the Chinese anti-trust body’s review period has been extended for 60 days. The company added that “will continue to work diligently to close the transaction as soon as possible.”

Late last month, a federal judge issued a preliminary injunction that bars Motorola from transferring confidential information by Chinese company Huawei Technologies to NSN. Huawei developed network technologies for Motorola for about a decade, and the Chinese company sued Motorola in January, saying it did not want its trade secrets falling into the hands of NSN, a major rival. The injunction remains in effect until Huawei and Motorola resolve the issue in arbitration in Switzerland.

About 7,500 Motorola employees are expected to transfer to NSN when the deal closes. The judge’s ruling from late February, however, revealed that Motorola has seen “higher than average” employee attrition in its networks unit since December, when the companies disclosed the delay in getting approval from Chinese authorities.

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