Ericsson to acquire majority of Nortel's North American wireless
business
(Thomson Reuters ONE) - Ericsson (NASDAQ:ERIC) has today entered into an asset purchaseagreement to acquire the parts of the Carrier Networks division ofNortel relating to CDMA and LTE technology in North America. Thepurchase is structured as an asset sale at a cash purchase price ofUSD 1.13 b. on a cash and debt free basis. This announcement followsthe completion of the auction process initiated by Nortel, and thetransaction is subject to court and customary regulatory approvals.Ericsson acquires an installed base and a healthy business thatprovides major operators CDMA technology and support services. Inaddition, the acquisition strengthens Ericsson's ability to serveNorth America's leading wireless operators in the evolution to LTE.The acquisition significantly expands Ericsson's footprint in NorthAmerica, particularly as this region is emerging as an early adopterof LTE technology. The acquisition also provides Nortel's customerswith a strong and reliable supplier for the future, many of whichhave expressed support for this acquisition."Acquiring Nortel's North American CDMA business allows us to servethis important region better as we build relationships for the futuremigration to LTE. Furthermore, by adding some 2,500 highly skilledemployees, of which about 400 are focused on LTE research anddevelopment, Ericsson reinforces and expands a long-term commitmentto North America. This deal, along with our recently announced Sprintservice agreement, truly positions Ericsson as a leading telecomssupplier in North America," said Carl-Henric Svanberg, President andCEO of Ericsson.The agreement includes important CDMA contracts with North Americanoperators such as Verizon, Sprint, U.S. Cellular, Bell Canada andLeap, as well as LTE assets, certain patents and patent licensesrelating to CDMA and LTE. Nortel's customers will also benefit fromthe continued support of Nortel's installed CDMA base and themigration path to LTE.Nortel's North American CDMA operations generated approximately USD2.0 b. in 2008, with robust profitability from a good product mix,which includes a significant amount of services. Going forward,research and development costs are expected to be relatively low inCDMA compared with other technologies.Ericsson's North American business generated SEK 17.9 (USD 2.7) b. ofsales in 2008, mainly from GSM and WCDMA equipment and associatedservices. When coupled with the recently announced Sprint servicesagreement, this acquisition makes North America the largest regionwithin Ericsson and encompasses some 14,000 employees.The robust financial profile of the acquired operations willcontribute significant top- and bottom-line additions to Ericsson.The transaction is expected to have a positive effect on Ericsson'searnings within a year after closing. Magnus Mandersson, presentlyhead of Ericsson Northern Europe, is appointed President of EricssonCDMA operations, and Richard Lowe, Nortel, is appointed ChiefOperating Officer."Our two companies share a long-standing commitment to technologicalexcellence and innovation, and we look forward to welcoming theNortel employees into Ericsson. We are truly impressed with theircontinuing outstanding performance during these challenging times,"said Magnus Mandersson, President of Ericsson CDMA operations."The agreement with Ericsson provides a strong and stable future forNortel's CDMA and LTE business. Customers will enjoy continued strongsupport from an industry leader as they look to evolve to LTE. Manyemployees will also have the opportunity to continue their work withEricsson, bringing their innovation power and creativity to thewireless industry for years to come," said Richard Lowe, President ofCarrier Networks at Nortel.Consummation of the transaction is subject to approval by the UnitedStates and Canadian Bankruptcy Courts and the satisfaction ofregulatory and other conditions.SEB Enskilda is acting as Ericsson's sole financial advisor in thetransaction.Notes to editors:Ericsson's multimedia content is available at the broadcast room:www.ericsson.com/broadcast_roomEricsson is the world's leading provider of technology and servicesto telecom operators. Ericsson is the leader in 2G, 3G and 4G mobiletechnologies, and provides support for networks with over 1 billionsubscribers and has a leading position in managed services. Thecompany's portfolio comprises of mobile and fixed networkinfrastructure, telecom services, software, broadband and multimediasolutions for operators, enterprises and the media industry. The SonyEricsson and ST-Ericsson joint ventures provide consumers withfeature-rich personal mobile devices.Ericsson is advancing its vision "to be the prime driver in anall-communicating world" through innovation, technology, andsustainable business solutions. Working in 175 countries, more than75,000 employees generated revenue of SEK 209 billion (USD 32.2billion) in 2008. Founded in 1876 with the headquarters in Stockholm,Sweden, Ericsson is listed on OMX NASDAQ, Stockholm and NASDAQ NewYork.www.ericsson.comwww.ericsson.mobiwww.twitter.com/ericssonpressFOR FURTHER INFORMATION, PLEASE CONTACTEricsson Corporate Public & Media RelationsPhone: +46 10 719 69 92E-mail: press.relations(at)ericsson.comEricsson Investor RelationsPhone: +46 10 719 00 00E-mail: investor.relations(at)ericsson.comEricsson Media Relations North AmericaKathy EganPhone: +1 212-843-8422E-mail: press.relations(at)ericsson.comEricsson discloses the information provided herein pursuant to theSecurities Markets Act and/or the Financial Instruments Trading Act.The information was submitted for publication at on July 25 2009,06.00 CET.http://hugin.info/1061/R/1330882/314730.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 25.07.2009 - 06:00 Uhr
Sprache: Deutsch
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