Nokia Siemens Networks will buy Motorola's telecom network equipment business for $1.2 billion, getting a stronghold in the North American market and taking No 2 position in the cut-throat mobile gear market.

Nokia Siemens Networks -- a 50-50 joint venture of Nokia and Siemens -- has struggled to make a profit in the $82 billion market, which was hit hard by the recession.

Under chief executive Rajeev Suri the venture has started to seek growth more aggressively and fight back against market leader Ericsson and China's Huawei. The Motorola deal will help the venture overtake Huawei.

Nokia Siemens tried to build a position in North America through an acquisition last year, but lost out on two major auctions of assets from bankrupt Canadian rival Nortel: first to Ericsson and then to Ciena Corp.

Both companies paid 0.57 times annual revenues for the Nortel business units.

Nokia Siemens is paying 0.32 times annual revenues for the Motorola business.

Nokia Siemens has struggled to take a larger share of North American business on its own; its revenues from North America shrank 9 per cent in the first quarter of this year to 153 million euros ($198.5 million), making just 6 per cent of the group total. – Reuters