July 27, 2017
Ericsson has won its bid to acquire Nortel’s wireless business for $1.13bn (£690m).
The Swedish telecoms giant has acquired Nortel’s CDMA and Long Term Evolution (LTE) technology portfolios.
Competition for the unit was fierce, with Ericsson fending off bids from Nokia Siemens Networks and BlackBerry-maker Research in Motion (RIM).
The deal has yet to be approved by the courts, however, as RIM claims it was blocked from the bidding process because it refused to agree not to bid for other Nortel assets in the next 12 months.
A court hearing this week will determine whether Ericsson’s bid is successful.
Nortel and Ericsson both welcomed the deal, with Ericsson promising to protect 2,500 Nortel jobs.
“The agreement between Nortel and Ericsson brings together leading-edge wireless innovation from two of the world’s top telecommunications suppliers,” said Ericsson chief executive Carl-Henric Svanberg.
“We at Ericsson look forward to integrating Nortel’s products and talented employees into our business and realising the full potential of our combined strengths.
“Ericsson is committed to meeting the needs of our new CDMA customers today and bringing the next generation of mobile broadband to the world with LTE.”
Mike Zafirovski, chief executive of bankrupt Nortel, said his company is continuing its search to find buyers for its other business units.
He added that the acquisition by Ericsson is good news for Nortel staff and customers: “The anticipated sale of our CDMA business and LTE Access assets […] 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 shareholders are unlikely to see any of the money from Ericsson, Zafirovski said.