TORONTO – Swedish telecom-equipment maker Ericsson was declared the winning bidder for bankrupt Nortel Network’s wireless business.
Ericsson’s bid of US $1.13 billion, which is still subject to final approvals, encompasses Nortel’s code division multiple access (CDMA) business – the second largest supplier of CDMA infrastructure in the world – and almost all of Nortel’s long term evolution (LTE) access assets “giving it a strong technology position in next generation wireless networks”, the company said in a press release.
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, though it is not clear on how many of those jobs will be in Canada.
"The anticipated sale of our CDMA business and LTE Access assets to Ericsson for $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”, president and CEO Mike Zafirovski said in the release. "Nortel remains focused on finding the right buyers for our other businesses while continuing to maintain excellent customer service levels. We are determined to maximize value while preserving innovation platforms, customer relationships and jobs to the greatest extent possible."
Calling last Friday’s auction “a significant step” in the overall sale process, it is not the final step. Nortel will seek Canadian and U.S. bankruptcy court approvals of the proposed sale agreement at a joint hearing on Tuesday afternoon. The deal also requires approval from regulators in both countries.
Nokia Siemens or MatlinPatterson, who bid US $650 million and US $725 million respectively, could still top Ericsson’s offer before the deal closes later this year. BlackBerry maker RIM, who last week claimed that it was blocked from the bidding process, could also still launch a formal bid.
