TORONTO – Bankruptcy courts in Ontario and the US have given the green light for LM Ericsson to purchase Nortel Network’s wireless business unit for US $1.13 billion.
The Swedish telecom-equipment maker outbid two other companies for Nortel’s code division multiple access (CDMA) business and almost all of Nortel’s long term evolution (LTE) access assets. The division, frequently referred to as the crown jewel of Nortel’s assets, counts telecom giants Bell Canada, Telus and Verizon Wireless among its North American customers.
The deal still requires federal regulatory approval before it can close later this year, however, there is growing pressure on the Federal Government to block the sale. Critics say that Nortel’s assets, developed with financial help from Canadian taxpayers, should stay in Canada.
A spokesperson from Industry Minister Tony Clement’s office told Cartt.ca on Wednesday that he has “no comment” on any plans by the Minister to intervene in the sale, at least during the court-ordered 21 day appeal period.
Ottawa could prevent the sale through a rarely used clause of the Investment Canada Act, which requires any foreign purchase to be of a “net benefit to Canada”. The government halted the sale of MacDonald Dettwiler and Associates’ space operations to a US company last year.
– Lesley Hunter
