Ericsson to buy Nortel's wireless biz for $1.13 bn

Ericsson is all set to acquire a major part of Nortel's North American wireless business for $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 $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 $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 $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.