Ericsson Buys More Nortel Network Assets

November 26, 2009 6:18 p.m. EST

Toronto, Ontario (AHN) - Ericsson won for the second time a bid to buy assets of bankrupt Canadian telecommunications company Nortel Networks.

Ericsson was the winning bidder a few months ago for Nortel's CDMA wireless business, which it purchased for $1.13 billion. On Tuesday, Nortel announced it picked again Ericsson and its partner, Kapsch CarrierCom, as the winning joint bidders for the global GSM and GSM-R businesses of Nortel. Their bid was for $103 million.

Included in the package are about 680 Nortel workers. Like the previous auction of Nortel assets, the GSM sale would require the approval of U.S and Canada courts. A joint hearing is slated on Dec. 2.

Once the deal is approved, Ericsson will get the North American GSM business and Kapsch will get the European and Taiwan GSM venture and the GSM-R business.

Nortel General Manager for GSM/GSM-R Graham Richardson said in a statement, "This is a major step forward for our business. These acquisitions will enable our customers to continue to benefit from the product innovation and support that they've come to expect from us. Today's announcement is also a turning point for our employees, the majority of whom will take their considerable expertise on to Ericsson and Kapsch."

Ericsson incoming President and Chief Executive Officer Hans Vestberg said, "Along with our recent acquisition of Nortel's CDMA and LTE assets, the transaction emphasizes Ericsson's commitment to the North American market and strengthens our position as a leading provider of telecommunications technology and services in the United States and Canada. Our Ericsson family will be once again enriched by the addition of the valuable Nortel employees."