Thursday, September 23, 2010

Ericsson Acquires Additional CDMA Assets from Nortel

Ericsson will acquire Nortel's Multi-Service Switch business (MSS), which includes CDMA-related R&D and services capabilities, for US$65 million in cash.

Ericsson said the acquisition gives it access to a strong product portfolio and installed base in the data segment while ensuring the supply of the MSS platform for the recently acquired CDMA and GSM units.

The announcement follows the completion of the auction process initiated by Nortel, and the transaction is subject to court approval and customary regulatory approvals.

"Today's announcement is further evidence of our commitment to our CDMA portfolio as we continue to strengthen our in-house R&D and services muscle to deliver on the innovation, collaboration and support that our customers have come to expect from us." said Rima Qureshi, senior vice president and head of business unit CDMA Mobile Systems.

  • In August, Nortel Networks announced plans to sell its Multi Service Switch business to private investors for US$39 million in cash. The deal includes Nortel's North America, Caribbean and Latin America (CALA) and Asia Multi Service Switch (MSS) business and the assets of the Europe, Middle East and Africa (EMEA) portion of its MSS business. The buyer is PSP Holding LLC, a special purpose entity to be fully funded at closing by Marlin Equity Partners and Canadian based Samnite Technologies Inc. Nortel's MSS business consists of its Data Packet Network and Shasta product groups and associated intellectual property.

  • In June 2010, Ericsson completed its acquisition of Nortel's majority shareholding (50%+1 share) in LG-Nortel, the joint venture of LG Electronics and Nortel Networks, for $242 million in cash. The deal significantly expands Ericsson's position in Korea, which is one of the 10 largest telecom markets in the world with advanced end-user demand for new services.

  • In March 2010, Ericsson completed its acquisition of Nortel's North American GSM business. The acquisition included the transfer of important GSM business with North American operators and further strengthened Ericsson's ability to serve North America's leading wireless operators. More than 350 employees from Nortel were involved. The deal was first announced in November 2009.

  • Also in November 2009, Ericsson completed its acquisition of substantially all of Nortel's CDMA business and LTE assets in North America. Under this deal, which was first announced on July 25, 2009, Ericsson paid US$1.13 billion. The acquisition included the transfer of important CDMA contracts with North American operators including Verizon, Sprint, U.S. Cellular, Bell Canada, Telus and Leap, as well as LTE assets, certain patents and patent licenses relating to CDMA and LTE. Approximately 2,500 Nortel employees in North America and China joined Ericsson under this transaction.

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