Courts give green light to Ericsson’s bid for Nortel

A bid by Swedish telecom giant Ericsson to buy part of Canada’s Nortel for $1.13 billion has been approved by Canadian and US courts.

Nortel “and certain of its other subsidiaries including Nortel Networks Inc., obtained orders from the Ontario Superior Court of Justice and the United States Bankruptcy Court for the District of Delaware approving the sale agreement with Telefonaktiebolaget LM Ericsson (“Ericsson”) for substantially all of Nortel’s” CDMA business and LTE Access assets, a company statement said.

CDMA is a mobile phone standard widely used in North America, where the global GSM standard is less commonplace. LTE is a next-generation standard for bigger and faster mobile phone networks.

Ericsson has said it would take over the carrier networks division of Nortel relating to CDMA and LTE technology in North America — a deal that includes contracts with the likes of Verizon and Bell Canada.

The acquisition — at a firesale auction of Nortel assets in New York on Friday — will make North America the biggest market for Ericsson, which last year reported sales there of $2.7 billion.

“Completion of the sale is subject to regulatory and other customary closing conditions, and the purchase price is subject to certain post-closing adjustments,” Nortel added, stressing it would “work diligently with Ericsson to close the sale later this year.”

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Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.