US-Canadian courts clear Nortel-Ericsson deal
30 July 2009
Canadian telecom major Nortel announced on Tuesday that it has received the green light from Canadian and US courts to sell a chunk of its North American business for $1.13 billion to Ericsson, the Swedish telecom major.
According to a company statement Nortel and some of its subsidiaries including Nortel Network Inc have 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 for substantially all of Nortel's CDMA business and LTE Access assets.
CDMA is a mobile phone standard that is in wide use in North America. GSM is has a limited presence across North America while LTE is a next-generation standard for faster and larger networks.
Ericsson will take over the carrier networks division of Nortel that use CDMA and LTE technology- a deal that involves players like Verizon and Bell Canada.
With the acquisition of Nortel assets on Friday Ericsson will emerge as the largest player in the North America in the telecom space. The company had last year reported North American sales of $2.7 billion.
The sale completion however, remains subject to regulatory and other closing conditions and the purchase price is subject to certain post-closing adjustments, Nortel said in a statement.