Canada to examine Ericsson-Nortel deal

Canadian Prime Minister Stephen Harper said his government will review Ericsson's $1.13 billion bid to purchase Nortel Networks' CDMA and LTE assets. However, he rejected calls from Research In Motion to simply block the sale, and seemed to indicate that Canada would not attempt to impose protectionist measures while it was busy promoting free trade.

Under the Investment Canada Act, the Canadian government can block an acquisition of a Canadian company if the sale threatens national security. The act also allows the government to block any sale exceeding $283 million if the deal does not bring a "net benefit" to the region's economy.

"This transaction will be examined under the Investment Canada Act," Harper said at a news conference in Panama City, according to Reuters. "There is a process in place to ensure that the transactions are examined when they are of a significant size and to ensure they are in Canada's national interest."

"At the same time, we do not intend to increase protectionism in investment questions when we are in a global campaign to encourage free trade," Harper also said, according to the Globe and Mail. Harper was in Panama signing a free trade agreement.

RIM praised Harper's comments in a statement it released last night. "Through his comments today, the prime minister has acted in a way that could facilitate an outcome that serves the interests of all parties and of Canada," the BlackBerry maker said. "RIM urges the government during the time in which it is reviewing the transaction to convene the parties in order to try to bring about such an agreement."

For more:
- see this Globe and Mail article [1]
- see this Reuters article [2] [3]

Related Articles:
Canadian government to hold emergency meeting over Nortel deal [4]
Why is RIM trying to block the Ericsson-Nortel deal? [5]
Courts approve Ericsson-Nortel deal [6]
Canadian government mulls Ericsson-Nortel intervention [7]
Ericsson wins Nortel wireless assets for $1.1B [8]