2nd UPDATE: China Approves Nokia Siemens' Motorola Assets Deal

Chinese regulators have approved Nokia Siemens Networks' planned acquisition of most of Motorola Solutions Inc.'s (MSI) network-equipment assets, the two companies said Thursday, clearing the path for the deal to close next week.

Nokia Siemens Networks, the joint venture between Finland's Nokia Corp. (NOK) and Germany's Siemens AG (SI), agreed to buy the bulk of Motorola's network-equipment business for $1.2 billion in July last year, but the deal was awaiting approval from China's Ministry of Commerce, which has the authority to review foreign mergers on antitrust grounds.

The sale is a key component of Motorola's restructuring, generating much-needed cash after the company split into two parts: Motorola Solutions, which sells public safety gear; and Motorola Mobility Holdings Inc., which sells mobile phones and set-top boxes.

The approval comes after a settlement between Chinese telecom equipment vendor Huawei Technologies Co. and Motorola Solutions last week removed a key obstacle to the deal's completion.

Privately held Huawei took legal action in January to delay the Nokia Siemens deal, saying that Motorola had sold Huawei-branded gear in the past, and that its intellectual property could therefore be transferred to rival Nokia Siemens through the planned acquisition. Huawei dropped its objections as part of a sweeping settlement between the two companies last week to drop suits filed against each other over intellectual property issues.

Under last week's settlement, Huawei agreed to drop its objections to the Nokia deal in exchange for a one-time fee for use of its technology. Huawei withdrew an objection over the Motorola assets sale that it had filed with the Ministry of Commerce.

Motorola agreed to drop its claims that Huawei had stolen its intellectual property via an elaborate scheme involving former Motorola employees and a front company.

The deal has now received all the regulatory approvals that it requires and the companies expect to close the deal on April 29, Nokia Siemens spokeswoman Riita Mard said Thursday. Motorola Solutions spokesman Nick Sweers confirmed the approval and expected closing date.

China's Ministry of Commerce didn't reply to a request for comment.

-By Owen Fletcher and Aaron Back, Dow Jones Newswires; (8610) 8400-7702; owen.fletcher@dowjones.com

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