Ericsson bids for Nortel assets

The fight over the bones of Nortel gets more intense. Ericsson has just become the third company to bid to buy the carrier wireless assets of Nortel Networks.

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The fight over the bones of Nortel gets more intense. Ericsson has just become the third company to bid to buy the carrier wireless assets of Nortel Networks.

Kathy Egan, Ericsson's New York-based vice-president of communications, csaid the company has placed a formal bid for the Nortel division that builds code division multiple access (CDMA) networks for wireless carriers and is working on Long Term Evolution technologies.

But she would neither confirm not deny a published report quoting an anonymous source claiming the amount Ericsson has bid is US$730(£442) million. If true that would make Ericsson the highest known bidder so far.

Ericsson is now the third company to go public with an offer to buy Nortel's carrier wireless unit. All companies who place bids will participate in a 24-hour court-supervised auction later today.

If Ericsson acquired the Nortel CDMA business, it would "bolster" Ericsson's recently-announced US$5 billion contract to manage Sprint's network in the US, said Philip Marshall, senior research fellow at the Boston-based Yankee Group.

See also: FAQ: What's going on with Nortel?

Nortel enterprise chief discusses Avaya deal

Toronto-based Nortel, which has been operating under bankruptcy protection since January, is currently looking for buyers for its business units. Earlier this week, Avaya said it had offered to buy Nortel's enterprise business for US$475 million.

In June, Nortel agreed to sell its CDMA and LTE unit to Nokia Siemens Networks for US$650 million. That agreement was known as a "stalking horse" bid because it set the stage for other companies to offer to buy the same assets.

Private equity firm MatlinPatterson, to whom Nortel owes more than $400 million, placed a bid of US$725 million in an attempt to trump Nokia Siemens Networks, which has promised to offer jobs to at least 2,500 Nortel workers and establish a centre of excellence in Ottawa.

Egan could not comment on how many Nortel employees Ericsson would retain if it acquired the CDMA assets, but Marshall said this would probably depend on Canadian government funding.

 
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