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November 24, 2009

Ericsson to buy Nortel’s North American GSM business

To strengthen its position in the US market

By CBR Staff Writer

Ericsson has agreed to acquire certain assets of the carrier networks division of Nortel relating to its GSM business in the US and Canada, for a purchase price of $70m on a cash and debt free basis, subject to adjustments. Ericsson has emerged as the successful bidder in an auction process initiated by Nortel.

The company said that its bid for Nortel’s GSM assets was made together with Kapsch CarrierCom of Austria. Under the agreements, Ericsson is acquiring certain assets of Nortel’s GSM business in North America while Kapsch is paying $33m to acquire most of the remaining assets outside North America.

Under the deal, Ericsson will acquire an installed GSM base that expands its North American footprint, and further strengthens its ability to serve North America’s wireless operators.

In addition, the agreement also includes the transfer of important GSM business with North American operators such as AT&T and T-Mobile. Under the agreement, Ericsson will offer employment to around 350 employees from Nortel.

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Earlier this month, Ericsson has completed the acquisition of Nortel’s CDMA and Long Term Evolution (LTE) assets for $1.13 billion.

Hans Vestberg, incoming president and CEO of Ericsson, said: Along with our recent acquisition of Nortel’s CDMA and LTE assets, the transaction emphasises Ericsson’s commitment to the North American market and strengthens our position as a leading provider of telecommunications technology and services in the United States and Canada. Our Ericsson family will be once again enriched by the addition of the valuable Nortel employees.

However, the transaction is subject to approval by courts in the US and Canada and customary regulatory approvals and other conditions.

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