Ericsson Nails Nortel LTE Acquisition

The Canadian government has declined RIM's call to review Ericsson's $1.13 billion purchase of Nortel's prized CDMA/LTE unit.
Canadian industry minister Tony Clement has decided against reviewing Ericsson's $1.13 billion acquisition of Nortel Networks' prized CDMA/LTE unit, in effect approving the sale and disappointing Research In Motion, which has complained it was unfairly excluded from bidding on the operation.

The unit is the most profitable piece of Nortel, which has been in bankruptcy proceedings since January. While LTE is just now being deployed in a few worldwide locations, the ultra-high-speed wireless networking technology is expected to eventually dominate the world's mobile phone offerings.

In sealing the fate of the acquisition in Ericsson's favor, Clement noted that Ericsson has been in business in Canada for more than 56 years and has invested more than $2 billion in R & D in Canada over the past 10 years.

"I am satisfied that the assets sold fall well below the threshold required for a review under the Investment Canada Act," Clement told reporters. "Based on all the information presented to me and to the government, there are no grounds to believe that this transaction could be injurious to Canada's national security."

BlackBerry provider RIM wanted the Nortel unit largely for its LTE assets. RIM has paid out more than $1 billion in patent litigation in recent years and wanted the Nortel assets to defend against any future intellectual property proceedings. "RIM is disappointed by the government's decision but nonetheless resolved to continue investing in Canada's future and furthering RIM's global leadership in wireless innovation," RIM said in a statement.

Nokia Siemens Networks had made an initial bid of $650 million for the CDMA/LTE unit, but interest by Ericsson, RIM, and some outside investors made it clear that they thought it was worth more than that.

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