Nortel sells CDMA and LTE businesses to Ericsson

Nortel Networks today announced that it has 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 US$1.13 billion. The bid is subject to court approvals in the U.S. 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.

“Nortel remains focused on finding the right buyers for our other businesses while continuing to maintain excellent customer service levels,” commented Mike Zafirovski, Nortel president and CEO. “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.”

“The agreement between Nortel and Ericsson brings together leading-edge wireless innovation from two of the world’s top telecommunications suppliers. 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,” said Carl-Henric Svanberg, president and CEO of Ericsson.

The sale of the CDMA and LTE assets to Ericsson follows a deal reached on July 20 by which Nortel entered into a “stalking horse” asset and share sale agreement with Avaya for its North American, Caribbean and Latin America (CALA) and Asia Enterprise Solutions business; and an asset sale agreement with Avaya for the Europe, Middle East and Africa (EMEA) portion of its Enterprise Solutions business for a purchase price of US$475 million. These agreements include the planned sale of substantially all of the assets of the Enterprise Solutions business globally as well as the shares of Nortel Government Solutions Incorporated (NGS) and DiamondWare.