Nokia Siemens Networks has taken a significant step towards strengthening its leadership in Long Term Evolution, or LTE, next generation wireless technology and expanding its market presence in North America with an agreement to acquire key assets from Nortel.
The planned USD 650 million acquisition will bring together the assets of the two companies in the field of mobile radio access. The acquisition of Nortel's profitable CDMA business would significantly improve Nokia Siemens Networks' presence in North America and make it a leading supplier of wireless infrastructure products in the region.
The transaction would see more than 2,500 Nortel employees - largely located in Ottawa, Canada and Dallas, United States but also including employees in Mexico and China - transferred to Nokia Siemens Networks. Approximately 400 of those employees are focused on LTE research and development. Nokia Siemens is already working with customers such as NTT Docomo in Japan. The support and development of Nokia Siemens Networks' existing product lines would be unaffected by this acquisition.
Export Development Canada (EDC), Canada's government-owned export credit agency, is supporting this transaction with a USD 300 million loan commitment.
Due to Nortel's restructuring process, the transaction is subject to the approval of the United States Bankruptcy Court and the Ontario Superior Court of Justice. Hearings by those courts to approve bidding procedures, break-up fee and expense reimbursement will be held on or before June 29, 2009, with final sale hearings expected on July 28, 2009 in the US and July 30, 2009 in Canada. Closing of the transaction, which is expected to occur in the third quarter of 2009, remains subject to customary closing conditions, including receipt of necessary regulatory approvals.