Ericsson to acquire Nortel wireless division

Swedish telecom giant Ericsson has bought the wireless division of Canadian group Nortel, currently under bankruptcy protection from creditors, for the equivalent of more than $1 billion (8 billion kronor).

The purchase will be made in cash and on a debt-free basis, according to a statement from Ericsson.

Ericsson is buying Nortel’s operations for the CDMA mobile system and the new LTE Internet technology.

“Acquiring Nortel’s North American CDMA business allows us to serve this important region better as we build relationships for the future migration to LTE….This deal, along with our recently announced Sprint service agreement, truly positions Ericsson as a leading telecoms supplier in North America,” said Carl-Henric Svanberg, President and CEO of Ericsson.

Following the deal, Ericsson’s North American business will have around 14,000 employees will become the company’s largest region. According to Ericsson, the operation has been profitable and has improved the overall performance of the company.

As part of the agreement, 2500 Nortel employees will now work for Ericsson. The deal is dependent upon approval by authorities and the American and Canadian bankruptcy courts.

Previously, Nortel sold its wireless technology manufacturing unit to Nokia for 4.85 billion kronor ($625 million) and recently sold its corporate network unit to Avaya for the equivalent of 3.3 billion ($425 million) kronor.

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Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.