Toronto: Ericsson is all set to acquire a
major part of Nortel's North American wireless business for
USD 1.13 billion, after the Swedish firm emerged as the
successful bidder for the bankrupt Canadian company's CDMA and
LTE technologies.
The purchase is structured as an asset sale at a cash
purchase price of USD 1.13 billion on a cash and debt free
basis, the two companies said in separate statements.
The acquisition significantly expands Ericsson's
footprint in North America and also provides Nortel's
customers with a strong and reliable supplier for the future,
many of which have expressed support for this acquisition.
"Acquiring Nortel's North American CDMA business allows
us to serve this important region better as we build
relationships for the future migration to LTE," Ericsson
president and CEO Carl-Henric Svanberg said.
Svanberg further said, "By adding some 2,500 highly
skilled employees, of which about 400 are focused on LTE
research and development, Ericsson reinforces and expands a
long-term commitment to North America."
On July 25, Ericsson entered into an asset purchase
agreement to acquire the parts of the Carrier Networks
division of Nortel relating to CDMA and LTE technology in
North America.
As part of this agreement, a minimum of 2,500 Nortel
employees supporting the CDMA and LTE Access business will
receive offers of employment from Ericsson.
Nortel president and chief executive officer, Mike
Zafirovski said, "The anticipated sale of our CDMA business
and LTE Access assets to Ericsson for USD 1.13 billion
represents a very positive prospect for our customers who will
be able to continue their relationships with a long term
partner; for employees who will have new opportunities at
Ericsson and for many of our other stakeholders."
Nortel's North American CDMA operations generated around
USD 2 billion in 2008.
The transaction is subject to approval by the United
States and Canadian Bankruptcy Courts and the satisfaction of
regulatory and other conditions.
Bureau Report
First Published: Sunday, July 26, 2009, 18:08