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Motorola Solutions and Huawei have settled their legal differences, paving the way for the former to sell its networking business to Nokia Siemens. However, the breaking out of peace comes at a price, with the price of the acquisition being reduced from $1.2bn to $975m.

The takeover, which had originally been expected to go through late last year, was delayed by a lawsuit from Huawei, claiming that the deal would result in its trade secrets being transferred to NSN, a key rival. Those secrets would have come Motorola’s way as a result of its decade-old OEM arrangement with Huawei for 2G and 3G equipment. Motorola had countersued with its own allegations of trade secrets theft.

The terms of the settlement were not disclosed but it ends all the litigation. Motorola will pay Huawei a one-time fee, and the Chinese giant will allow NSN to access the information required to service any Huawei-made networks Motorola has in the market. The revised date for finalizing the takeover is April 29, over nine months after it was first announced. The price to Motorola could be hefty. Apart from the reduced purchase price, the fee to Huawei will apply to any GSM or W-CDMA systems still in use that were based on the Chinese company’s technology. There was quite a rush of deals after 2006, when Motorola exited the W-CDMA market in its own right and relied only on its Huawei partnership to provide an upgrade path for its 65 GSM sites worldwide. According to the joint statement, Motorola bought $880m in Huawei RAN and core kit over the full life of the agreement, though some of that will now have been replaced.

In a statement, Motorola Solutions’ CEO Greg Brown said: “We regret that these disputes have occurred between our two companies. Motorola Solutions values the longstanding relationship we have had with Huawei. After reviewing the facts, we decided to resolve these matters and return to our traditional relationship of confidence and trust. I am pleased that we can again focus on having a cooperative and productive relationship.”

Once the deal goes through at last, NSN’s new north American head, Rick Corker, will oversee the integration of Motorola Networks. The chief advantages to NSN are seen in US and Japanese expansion, although the acquisition is a consolation prize after NSN lost out to Ericsson in the bid to buy a larger player in the US market, Nortel. Corker, formerly head of Asia-Pac at NSN, is replacing Sue Spradley this week. NSN will keep Motorola’s Chicago headquarters and several north American R&D centers, and will inherit 7,500 non-iDEN employees, many focused on LTE, WiMAX and CDMA.

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