TORONTO – Nokia Siemens Networks has agreed to buy Nortel Network’s wireless unit for U.S. $650 million.
The agreement, disclosed late Friday, will cover Nortel’s code division multiple access (CDMA) business and long term evolution (LTE) access assets, the press release said. At least 2,500 Nortel employees, described as “a significant portion of the employees associated with the assets being sold”, will have the opportunity to join Nokia Siemens. The wireless business is the second largest supplier of CDMA infrastructure in the world.
Nortel president and CEO Mike Zafirovski called the deal “solid proof” of the value of the company’s wireless division, and said that the sale represents “the best path forward for our other businesses."
"Maximizing the value of our businesses in the face of a consolidating global market has been our most critical priority,” Zafirovski said in the release. “We have determined the best way to do this is to find buyers for our businesses who can carry Nortel innovation forward, while preserving employment to the greatest extent possible. This will ensure Nortel’s strong assets – technologies, customer relationships, and employees – continue to play an important role in driving the future of communications.”
Known as a ‘stalking horse’ asset sale agreement, the Nokia Siemens deal is designed to encourage other potential buyers to bid on Nortel’s assets.
The now-bankrupt telecom giant said that it is in discussions with potential buyers to sell off its other businesses, and will “assess other restructuring alternatives for these businesses in the event it is unable to maximize value through sales.”
It also said that it will ask to have its shares delisted from the Toronto Stock Exchange, and expects that the creditor protection proceedings will ultimately result in the cancellation of these equity interests.
