UPDATE 2-China delays NSN’s $1.2 bln buy of Motorola unit

* Nokia Siemens (NSN) paying $1.2 bln for Motorola unit

* Says has received all approvals, except from China

* Sees deal now closing now in Q1 2011

* Motorola says delay not impacting split-up

(Adds analysts, Motorola comments)

By Tarmo Virki, European technology correspondent

HELSINKI, Dec 28 (BestGrowthStock) – Nokia Siemens Networks’
[NSN.UL] agreed $1.2 billion acquisition of Motorola’s (MOT.N: )
telecom network equipment arm has been delayed by the Chinese
regulator, which has yet to grant permission for the deal.

The chief executive of Nokia Siemens, Nokia’s (NOK1V.HE: )
network gear unit, said he was working closely with the
Anti-Monopoly Bureau of the Ministry of Commerce of China to
finalise the clearance.

“This delay is disappointing, but we’re looking forward to
completing the acquisition early in the new year,” Nokia Siemens
Networks CEO Rajeev Suri said in a statement on Tuesday.

The deal will strengthen Nokia Siemens – a joint venture
between Nokia and Germany’s Siemens (SIEGn.DE: ) – against its key
Chinese rivals, and make it the second-largest mobile telecom
gear maker ahead of China’s Huawei [HWT.UL].

All other regulatory clearances for the deal which will grow
Nokia Siemens business in key markets in North America and
Japan, have been obtained, Nokia Siemens said.

“Nowadays Chinese approval is a pre-closing condition for
many high-tech M&A transactions, and the Chinese Ministry of
Commerce has previously shown that it takes its time even after
other regulators clear a deal,” said Florian Mueller, consultant
on competition issues.

“China proved in the Panasonic-Sanyo case that it stood its
ground even after a deal had been cleared by the U.S. and the
EU, and insisted on additional remedies,” Mueller said.

In October 2009 China granted Panasonic Corp (6752.T: )
anti-monopoly clearance to buy Sanyo Electric Co Ltd (6764.T: )
subject to conditions, including cutting its stake in a battery
venture with Toyota Motor Corp (7203.T: ).

Motorola and NSN have had a hard time battling bigger
players to win business with large telephone companies in the
cut-throat mobile gear market, which is expected by analysts to
decline in 2010.

Motorola has only 3 percent share of global mobile network
market, but it gives Nokia Siemens relationships with more than
50 telecom operators and to strengthen its position with major
carriers like China Mobile, Clearwire, KDDI, Sprint, Verizon
Wireless and Vodafone. [ID:nLDE66I02A]

Motorola said the delay in unit sale would not impact its
ongoing split-up.

“It will not affect the separation of Motorola, which is on
schedule for Jan. 4, 2011,” said Motorola Solutions spokeswoman
Tama Mcwhinney.

In New York Nokia shares (NOK.N: ) were 0.4 percent lower at
$10.18 at 1640 GMT, while Motorola 0.1 percent lower at $8.98.

(Additional reporting by Yinka Adegoke in New York; Editing
by Erica Billingham)

UPDATE 2-China delays NSN’s $1.2 bln buy of Motorola unit