Ericsson bags Nortel wireless arm for $1.13bn

Fellow Ontarian firm RIM wants to keep Nortel's assets in Canada

Swedish telecommunications behemoth Ericsson has prevailed in the bidding war for Nortel's wireless business after grabbing the unit for $1.13bn (£690m).

Last month Nokia Siemens Networks signed a $650m stalking horse agreement with the embattled Canadian vendor to buy its CDMA and LTE access assets. The bidding process kicked off by that agreement also saw venture capital firm MatlinPatterson tabling a bid.

Research in Motion (RIM) declared its willingness to splash out $1.1bn on the unit. But the BlackBerry maker claimed it was unfairly blocked from the bidding process as it refused to agree not to bid for other Nortel assets in the next 12 months.

Despite the auction's close, RIM has not given up the fight, with the deal yet to be approved by courts and regulators. A hearing is scheduled for tomorrow and RIM has called on the powers that be to ensure Nortel's assets stay in Canadian hands.

The firm issued the following statement over the weekend: "Now that the auction is completed, the government has the authority and responsibility to get involved to protect vital Canadian interests.

"RIM appreciates the stated willingness of the minister of industry to review the situation following the results of the auction. RIM stands ready to engage. "

In the meantime, chiefs at Nortel and Ericsson have welcomed the deal, with the latter promising to protect the jobs of 2,500 workers. Ericsson chief executive Carl-Henric Svanberg said:

"The agreement between Nortel and Ericsson brings together leading-edge wirel ess 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. Ericsson is committed to meeting the needs of our new CDMA customers today and bringing the next generation of mobile broadband to the world with LTE."

Nortel chief executive Mike Zafirovski claimed his firm was still focused on finding buyers for its other business units. He added that the sale of Nortel's various units would ensure the vendor "leaves its mark on the industry for decades to come".

He added: "The anticipated sale of our CDMA business and LTE Access assets to Ericsson for $1.13bn represents a very positive prospect for our customers who will be able to continue their relationships with a long-term partner; for employees who will have new opportunities at Ericsson and for many of our other stakeholders. I want to especially thank our customers for their tremendous support during the process, which contributed to such a positive outcome."