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CIEN Ciena will be $35+ in 4 months $18.23
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[QUOTE]Originally posted by invester: [QB] Another network equipment buy. ADCT last week now MOT. I just can't believe how cheap CIEN is. There going to get taken out. 3rd UPDATE: Nokia Siemens Buys Motorola Gear Business For $1.2 Billion Monday 07/19/2010 11:43 AM ET - Dow Jones News Related Companies Symbol Last %Chg ALU 2.67 -0.19% CHL 49.68 0.96% CIEN 12.52 -2.19% ERIC 11.69 1.91% MOT 7.90 5.33% As of 2:23 PM ET 7/19/10 (Adds further executive and analyst comments, background throughout.) By Gustav Sandstrom and Roger Cheng Of DOW JONES NEWSWIRES Telecom equipment vendor Nokia Siemens Networks said Monday it has agreed to pay $1.2 billion for the majority of U.S.-based Motorola Inc.'s (MOT) network equipment business in order to gain a stronger foothold in the important North American and Japanese markets. In a joint statement, the companies said they expect the all-cash deal to close by the end of 2010. Nokia Siemens is making the acquisition primarily to boost its position in markets like the U.S. and Japan and gain access to new customers, but the deal will also provide economies of scale and synergies in areas such as mobile broadband, Chief Executive Rajeev Suri told Dow Jones Newswires Monday. Nokia Siemens, a joint venture between Finland's Nokia Corp. (NOK) and Germany's Siemens AG (SI) said it expects the transaction to strengthen its business relationships with a number of telecom operators including China Mobile Ltd. (CHL), Sprint Nextel Corp. (S) and Vodafone Group PLC (VOD). The stronger relationships are necessary as it finds itself squeezed by market leader L.M. Ericsson Telephone Co. (ERIC) and rising upstart Huawei Technologies Co. (HWI.YY). "This deal is about customers," Suri said. "I expect to gain an incumbent position with many new customers." As a result of the deal, Nokia Siemens expects to become the largest foreign wireless gear vendor in Japan, the third-largest in the U.S., and to strengthen its number two position in the global infrastructure segment. The Motorola acquisition would provide much-needed economies of scale for Nokia Siemens, said analyst Sylvain Fabre at research firm Gartner, adding that the telecom gear industry has long been ripe for consolidation. He said, however, that the integration will be a distraction for the company, which itself has been through an extensive integration process since its creation around three years ago. Still, Suri said the Motorola takeover should be uncomplicated in comparison. "I don't think this is anywhere close to the integration we have been through," he told Dow Jones Newswires. Approximately 7,500 employees are expected to transfer to Nokia Siemens Networks from Motorola's wireless network infrastructure business when the transaction closes, the companies said. Suri said he doesn't expect any layoffs. Siemens and Nokia will support the deal by transferring a shareholder loan of EUR250 million each into preferred equity, it said, but added that the acquisition will be fully funded by Nokia Siemens. Motorola's decision to break up the company through the sale of its network equipment business was demanded by activist investor Carl Icahn and aims to increase the company's market value. The company hopes it will force analysts to assess the cellphone and cable set-top boxes businesses separately from the remainder of the company, which makes public-safety equipment and hand-held scanners. "I think this is fantastic news," Motorola Co-CEO Greg Brown told Dow Jones Newswires. "It's unlocking value for the separation and enabling a pure-play worldwide leading enterprise business." Motorola is expected to split itself into two companies in the first quarter, with Brown now taking over the enterprise mobility and public safety units, and co-CEO Sanjay Jha running the mobile devices and television set-top box businesses. Brown said the Nokia Siemens deal doesn't affect the timing of the split, and declined to say which business would get the $1.2 billion. Still, analysts believe the deal represents the right direction for Motorola. "Bottom line, Motorola is taking more steps to separate their businesses and get fair market value--a positive," said Ittai Kidron, an analyst at Oppenheimer & Co. Motorola shares rose 1.3% to $7.60. Nokia Siemens has made no secret of its ambitions to enter the U.S. market. Last year, it bid for two units of bankrupt Nortel Networks Corp., only to lose the bulk of the wireless-equipment business to Ericsson and Nortel's metro ethernet unit to U.S.-based Ciena Corp. (CIEN). Under the deal announced Monday, Nokia Siemens will take over most of Motorola's network equipment assets such as its GSM and CDMA business, while Motorola will retain control of the less widespread iDEN technology and a number of other assets such as network infrastructure related patents. The acquisition will boost Nokia Siemens' position in the U.S. market and give it access to a network of new customers who may later choose the vendor for fourth-generation network upgrade deals, said Redeye analyst Greger Johansson. Meanwhile, analyst Pierre Ferragu at Bernstein said the valuation of Motorola's assets looks fair, at 0.3 to 0.5 times sales. The deal should be positive for Nokia Siemens as the wider network equipment industry consolidates, he added. -By Gustav Sandstrom, Dow Jones Newswires; +46-8-5451-3099; gustav.sandstrom@dowjones.com (Roger Cheng in New York and Archibald Preuschat in Duesseldorf contributed to this story.) (END) Dow Jones Newswires 07-19-10 1143ET Copyright (c) 2010 Dow Jones & Company, Inc. [/QB][/QUOTE]
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