Nortel’s “stalking horse” asset sale agreement with Nokia Siemens Networks B. V. for its wireless business triggered a bidding war and the winner has turned out to be Swedish-based Ericsson. The winning bid came in at US$1.13 billion, far more than the original US$650 million initially offered by Nokia.
Ericsson acquires an installed base and a healthy business that provides major operators CDMA technology and support services. In addition, the acquisition strengthens Ericsson’s ability to serve North America’s leading wireless operators in the evolution to LTE. The acquisition significantly expands Ericsson’s footprint in North America, particularly as this region is emerging as an early adopter of LTE technology.
As part of the agreement, some 2,500 Nortel employees working in the CDMA and LTE Access business will receive offers of employment from Ericsson.
Nortel and Ericsson will now need to obtain Canadian and U.S. court approvals of the proposed sale agreement.