The Canadian government declined to review the $1.13 billion sale of Nortel Networks' CDMA and LTE assets to Ericsson, clearing out a potentially major obstacle to the deal. The announcement by Canada's Industry Minister, Tony Clement, brings to a close months of speculation over whether the government would intervene in the sale of the bankrupt firm's wireless assets, as Canadian BlackBerry maker Research In Motion had urged.
Industry Minister Tony Clement said that the deal fell well below the threshold required for review under the Investment Canada Act. He said the assets had a book value of about $171 million ($182.5 million Canadian), below the threshold of $312 million Canadian.
"There are no grounds to believe this transaction could be injurious to Canada's national security," Clement said Wednesday, adding that Ericsson "has the resources and customer base necessary to bring Canadian innovation to market. ... This deal is very beneficial to Canada."
The news is a blow to RIM, which had lobbied hard to keep the assets--especially Nortel's LTE operations--in Canadian hands. RIM said that it was blocked from the bidding process for Nortel's wireless assets in July, but Clement said there was no evidence of that.
"My understanding is that any company that had concerns about the process was heard by the courts and any company that wanted those assets was able to bid on them," he said. "I have not seen nor have I been advised of any attempt to block any qualified company from bidding."
Bankruptcy courts approved the sale in late July. Ericsson expects the deal to close sometime this quarter.
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