Nortel’s US and Canada GSM business acquire by Ericsson

Ericsson  selected as successful bidder to acquire certain assets of the
Carrier Networks division of Nortel relating to Nortel’s GSM business
in the US and Canada. The purchase is structured as an asset sale at a
cash purchase price of USD 70 million on a cash and debt free basis,
subject to adjustments. This announcement follows the completion of the
auction process initiated by Nortel, and the transaction is subject to
approval by courts in the US and Canada and customary regulatory
approvals and other conditions.
Ericsson’s bid for Nortel’s GSM assets was made
together with Kapsch CarrierCom AG of Austria. Under the agreements,
Ericsson is acquiring certain assets of Nortel’s GSM business in North
America while Kapsch is paying USD 33 million to acquire most of the
remaining assets outside North America.
Ericsson acquires an installed GSM base, which
expands its North American footprint. The acquisition further
strengthens Ericsson’s ability to serve North America’s leading
wireless operators, which now benefit from the strength of the combined
resources in an experienced and financially strong company.
"Along with our recent acquisition of Nortel’s CDMA
and LTE assets, the transaction emphasizes Ericsson’s commitment to the
North American market and strengthens our position as a leading
provider of telecommunications technology and services in the United
States and Canada" said Hans Vestberg, incoming President and CEO of
Ericsson. "Our Ericsson family will be once again enriched by the
addition of the valuable Nortel employees."
The agreement includes the transfer of important GSM
business with North American operators such as AT&T and T-Mobile.
Under the agreement Ericsson will offer employment to approximately 350
employees from Nortel. Nortel’s North American GSM operations generated
approximately USD 400 million in 2008.
Ericsson’s North American business generated SEK
17.9 bn (USD 2.7 b) of sales in 2008, mainly from GSM and WCDMA
equipment and associated services. Together with the recently announced
acquisition of CDMA and LTE assets as well as the Sprint services
agreement, the acquisition makes North America the largest geographical
segment within Ericsson and encompasses some 14,500 employees, up from
5,000 at the beginning of 2009.
The acquired operations will contribute top- and
bottom-line additions to Ericsson. The transaction is expected to have
a positive effect on Ericsson’s earnings within a year after closing.
Consummation of the transaction is subject to
approval by the United States and Canadian Bankruptcy Courts and the
satisfaction of regulatory and other conditions.

SEB Enskilda is acting as Ericsson’s sole financial advisor in the transaction.


Please enter your comment!
Please enter your name here