Auction of Nortel's wireless assets won by Ericsson for $1.13 billion
The wireless assets of the Toronto-based bankrupt Nortel Networks Corp have been won by Sweden’s Ericsson for $1.13 billion, in an auction that stretched well into Friday night in the conference rooms at a New York law firm. Nortel will seek the approval of the sale of its assets form the bankruptcy courts in the US and Canada on July
The Nortel auction - which was triggered this spring with Nokia Seimens’ voluntary $650 million bid, which set the floor price - had three bidders: Ericsson, Nokia Siemens Networks, and distressed debt investor MatlinPatterson Global Advisers LLC.
The winning of the auction by Ericsson entails the acquisition of Nortel’s assets like its lucrative – though currently declining - CDMA business, which sells a key wireless technology to leading US carriers like Verizon and Sprint; as well as a team of 400 researchers working on a high-end broadband technology called LTE, or long term evolution.
The Nortel-Ericsson deal will appreciably increase Ericsson’s presence in North America, making it the largest region within Ericsson. With the Nortel assets to be acquired debt free by Ericsson, the company said it intends adding the purchase to its earnings within a year of closing.
Meanwhile, Ericsson’s Northern Europe chief, Magnus Mandersson, will be President of the company’s CDMA operations; and Nortel’s Richard Lowe will be the Chief Operating Officer.