US-based NewNet Communication Technologies has announced plans to buy Nokia Siemens Networks’ (NSN) WiMAX business. The agreement is expected to close by the end of the year and will see NewNet acquire the entire WiMAX product portfolio – originally part of Motorola Solutions – and all active customer and supplier contracts and see 300 NSN employees move to NewNet.
“The addition of the WiMAX business would enhance the breadth of NewNet’s product portfolio, R&D capabilities, customer relationships and our overall market position in providing wireless infrastructure solutions to carriers on a global basis,” said NewNet president and CEO Ron Pyles.
“We believe that our current WiMAX customers would receive the highest quality products, services and sales support from NewNet,” NSN's head of network systems Marc Rouanne added. Financial terms of the deal were not disclosed.
NSN announced plans last week to cut 17,000 jobs or 23 percent of its global workforce, in order to “improve profitability and cash generation," according to CEO Rajeev Suri. A leaked memo said the company was looking to exit a number of business areas as part of the restructure, including WiMAX, and today's deal will therefore have been warmly welcomed by Suri.
Separately, it has been reported that NSN is seeking a forward-start loan for EUR1.5 billion to ensure it can renew credit agreements that expire next year. Bloomberg reports that the borrowing for the network-equipment venture of Nokia and Siemens becomes effective in June to replace a EUR2 billion credit line. It comprises a one-year term loan and a revolving credit expiring before June 2015.