In a $650-million dealNokia Siemens Networks recently announced the acquisition of key assets from Nortel. With the new purchase, the company is moving forth in the strengthening of its leading position in Long Term Evolution, or LTE, next generation wireless technology, and is also expanding its presence on the market in North America.
The acquisition is priced at USD 650 million, and will enable Nokia Siemens Networks to put together highly complementary assets of the two firms, while also enhancing its presence in the LTE area. At the same time, the purchase of Nortel's profitable CDMA business is meant to leverage the company's presence in North America and offer it the possibility to become a leading provider of wireless infrastructure products in the area.
“This agreement provides an important strategic opportunity for Nokia Siemens Networks to strengthen its position in two key areas, North America and LTE, at a price that makes good economic sense,” said Simon Beresford-Wylie, Chief Executive Officer of Nokia Siemens Networks. “It also represents stability for Nortel's existing customers and offers a great opportunity for employees to move into a stable future with an industry winner. The R&D organization in Canada would become a long-term wireless center of excellence within Nokia Siemens Networks, complementing our other global sites.”
According to Nokia Siemens Networks, 2,500 Nortel employees, most of which are located in Ottawa, Canada and Dallas, United States, and some from Mexico and China will be transferred to the company, 400 of them working on LTE research and development. In addition, the infrastructure provider also announced that the acquisition would not influence the support and development of Nokia Siemens Networks' existing product lines.
As many of you might already know, Nortel is in a restructuring process at the moment, and United States Bankruptcy Court and the Ontario Superior Court of Justice should approve the deal. The final sale hearings should be held on July 28, 2009 in the US and July 30, 2009 in Canada. The transaction is expected to be closed during the third quarter of the year, yet it is subject to customary closing conditions, including receipt of necessary regulatory approvals, added the infrastructure provider.