Nortel Networks Corporation announced today that it, its principal operating subsidiary Nortel Networks Limited, and certain of its other subsidiaries including Nortel Networks Inc., have concluded a successful auction of substantially all of Nortel’s CDMA Business and LTE Access assets.
Ericsson has emerged as the winning bidder with a purchase price of $1.13 billion. The bid is subject to court approvals in the US and Canada as well as regulatory and other customary closing conditions and certain post-closing purchase price adjustments.
If approved by the courts, Ericsson will purchase Nortel’s CDMA business which is the second largest supplier of CDMA infrastructure in the world, and substantially all of Nortel’s LTE Access assets giving it a strong technology position in next generation wireless networks. Also 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.
Commenting on the announcement, 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. I want to especially thank our customers for their tremendous support during the process, which contributed to such a positive outcome.”
He continued: “Nortel remains focused on finding the right buyers for our other businesses while continuing to maintain excellent customer service levels. We are determined to maximise value while preserving innovation platforms, customer relationships and jobs to the greatest extent possible. With today’s agreement and through the anticipated sales of the Company’s other businesses, Nortel will leave its mark on the industry for decades to come.”
Commenting on the sale, Richard Lowe, president of carrier networks at Nortel, said: “The outcome of today’s auction underscores the value the industry places on Nortel’s CDMA business and LTE Access assets, which include a strong customer base and world-class operations. Nortel’s extremely talented and committed employees have been an integral part of our success in wireless and we are very pleased that so many of them will have the opportunity to continue their innovative work with Ericsson.”
While today’s auction is a significant step in the overall sale process, it is not the final step. Nortel will work diligently with Ericsson to close the sale later this year. Nortel will set the proposed sale agreement at a joint hearing on 28 July 2009.