Huawei’s Revenge?

March 16th, 2011 by · Leave a Comment

I read with interest the recent news that Nokia Siemens is trying to restructure its proposed acquisition of Motorola Solutions.  Apparently, regulatory approval is the hangup.  No, not in the US, nor in Europe, but in China where they have delayed clearing the purchase twice now - to the extent that the transaction is somewhat in doubt at this point.  Yes, China is apparently very worried about this deal, and the driving force behind their concerns is none other than Huawei.
Huawei has sued to stop the purchase because it had a 10 year agreement with Motorola under which Motorola sells rebranded Huawei gear, and they're worried that NSN might steal patented technology that it has no right to.  Yep, you read that right, Huawei is worried about someone else copying it's technology.  The irony is palpable.  Of course, this has nothing to do with any hard feelings over the rough regulatory treatment and public abuse in the press that Huawei has had lately when trying to buy its way into international markets.  Nobody holds a grudge in telecom, right?  All's fair in telecom and patents...

What strikes me most of all though is that Chinese regulators are in a position to torpedo such a deal.  That China's market is critical nowadays is obvious, but few realize just how byzantine the country's really bureaucracy is.  If everybody's going to have to jump through major hoops in Beijing, it's going to slow down future deals rather quickly.

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Categories: Mergers and Acquisitions · Telecom Equipment

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