Ericsson was the winning bidder for bankrupt Nortel Networks' North American GSM business, further fortifying its position in the North American mobile equipment market. Ericsson's $70 million bid for Nortel's North American GSM unit comes in the wake of its acquisition of Nortel's CDMA and LTE assets for $1.13 billion.
Another company, Austrian firm Kapsch CarrierCom, will pay $33 million for Nortel's GSM assets in Europe and Taiwan, and also will purchase Nortel's GSM-R business, which makes technology used on railways.
Through the deal, Ericsson gains AT&T Mobility and T-Mobile USA as customers and roughly 350 employees from Nortel. Nortel's North American GSM operations generated around $400 million in 2008, Ericsson said. Ericsson said it expects the acquisition to have a positive impact on its earnings within a year of the deal's close, but it's unclear how significant of an impact it will be.
The sale of the the GSM units is the latest in Nortel's breakup. Earlier this week, Ciena emerged as the winning bidder for Nortel's Metro Ethernet Networks and optical divisions, with a winning bid of $769 million.
- see this Ericsson release
- see this Nortel release
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