Ericsson deal concludes Nortel sell-off
Nortel has agreed the sale of the final piece of its networks business, with a deal to sell its Chinese R&D and services joint venture to Ericsson.
The European vendor will pay $50 million (€38 million) in cash for the bulk of Guangdong Nortel Telecommunication Equipment Company (GDNT) assets, a move Ericsson says will boost its GSM and CDMA development capabilities.
Nortel is a majority partner in GDNT, a joint venture with Chinese shareholders that provides GSM and CDMA equipment and services.
The deal covers GDNT’s R&D and manufacturing facilities, support and customer service facilities, and around 1,100 staff.
Nortel chief strategy officer George Riedel said the sale is the last significant divestiture since the Canadian company entered administration in early 2009.
Ericsson has been a key GDNT customer since acquiring Nortel's CDMA and GSM assets for $1.13 billion last year.
The vendor expects the latest acquisition to have a positive impact on earnings within a year of completion.