Swedish wireless equipment maker LM Ericsson could nearly double its North American revenues and add 2,500 employees to its workforce with the purchase of Nortel Networks’ profitable and stable wireless business for $1.13 billion US.
Ericsson and Nortel announced the all-cash purchase Saturday. The transaction covers Nortel’s older CDMA technology, as well as newer long-term evolution, or LTE, wireless businesses of the insolvent Canadian company’s Carrier Networks unit.
In 2008, Ericsson’s North American business generated around $2.7 billion US of sales.
Ericsson CEO Carl-Henric Svanberg said the acquisition would add 2,500 employees to his company, of which about 400 are focused on LTE research and development. More than a third of the 2,500 jobs in the division are in Ottawa, where Nortel employs about 1,000 people.
The deal is subject to approval by bankruptcy courts in Canada and the United States tomorrow and government regulatory authorities in both countries.