Sweden’s Ericsson has won an auction for the wireless assets of bankrupt Nortel Networks Corp, paying $1.13 billion for the crown jewels of the one-time Canadian telecom star.
In separate statements, the two companies said last Saturday Ericsson had won the bidding for Nortel’s key CDMA and nexgen LTE wireless technologies, which Nortel put on the block after it filed for creditor protection in January. The assets include Nortel’s businesses in the CDMA wireless technology used in North America and in the emerging LTE high-speed wireless technology that many of the world’s biggest operators plan to use to upgrade their telecommunications networks, as well as some patents. Ericsson’s offer virtually assures Nortel will be broken up, rather than emerge from bankruptcy protection as a slimmed-down single unit. Toronto-based Nortel, once North America’s biggest maker of telephone gear, filed for bankruptcy protection early this year, blaming the economic crisis for derailing a turnaround effort that began in 2005. That followed several rounds of attempted reorganizations and years of job cuts that slimmed the company down to 25,000 employees, from a peak of about 90,000 at the height of the technology boom at the start of the decade. Shares in the company, which once had a market capitalization of over $250 billion, have fallen to almost nothing, and Nortel said it did not expect existing shareholders to receive any value from the latest sale.
