NSN, Motorola and Huawei relationships part cooperative, part accusatory: NSN buy of Motorola assets on hold amid Chinese regulatory review

In a bit of a tangled infrastructure web, Nokia Siemens Networks said it would not complete its proposed acquisition of Motorola Inc.’s wireless networks infrastructure business this quarter because Chinese regulatory authorities are still reviewing the matter. The delay is just the latest twist in a complicated triangle between Motorola, Huawei Technologies Co. Ltd. and NSN.
In January, Chinese vendor Huawei asked a U.S. court to block the sale of some of Motorola’s wireless networks business to Nokia Siemens Networks, charging that the $1.2 billion proposed sale of the business could transfer Huawei’s intellectual property around GSM and UMTS technologies to NSN. At the time, Huawei noted that it has had a cooperative relationship with Motorola since 2000. “Since 2000, Huawei and Motorola have had a cooperative relationship in the radio access network and core network businesses, where Motorola has resold Huawei wireless network products to customers under the Motorola name,” according to a statement from Huawei. “During this period, Motorola was provided with products and confidential Huawei IP developed by Huawei’s team of more than 10,000 engineers. Since the July 2010 announcement by NSN of its purchase of Motorola’s wireless network business, Huawei has tried to ensure that Motorola does not transfer this confidential information to NSN. Motorola, however, has not responded with assurances that it will prevent disclosure of that information to NSN.”
However, that agreement might not be all that cooperative because Motorola last summer expanded a 2008 intellectual property theft lawsuit to include Huawei. Motorola originally sued Chinese vendor Lemko Corp. for alleged theft of trade secrets and later included Huawei in the lawsuit, charging that the two companies have a “secret relationship” and that Lemko and Huawei both have products that are based on Motorola’s SC300 microcell base station transceiver. Huawei has denied any such relationship. Lemko filed a countersuit.
For its part, NSN said the proposed acquisition has entered the third phase of a review process by Chinese anti-monopoly regulatory authorities. “Nokia Siemens Networks remains committed to the acquisition but will provide no further guidance on when it is likely to be completed,” the company said in a prepared statement. When first announcing the proposed aquisition, NSN said it expected 7,500 employees to transfer from Motorola to NSN, including research and development sites in the United States, China and India.
In the meantime, Huawei has openly asked the U.S. government to review the company as it tries to expand in the U.S., but has been thwarted due to concerns it has ties with the Chinese military, a relationship Huawei denies.