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Ericsson and Kapsch buy Nortel's GSM Units

(25 Nov 2009, BWCS Staff)

Bankrupt Canadian equipment vendor, Nortel Networks, has sold its GSM and GSM-R business to Ericsson and Kapsch CarrierCom AG it was announced today. Between them, the pair will pay a total of US$103 million for the once dominant equipment maker's assets. The deal means that Ericsson will get Nortel's US GSM business, for US$70 million in cash and no debt, while Kapsch will capture most of the remaining GSM assets outside the US, including the GSM-R portfolio, for US$33 million.

The move could be seen as something of a bargain as Nortel's North American GSM operations generated around US$400 million in 2008. Ericsson said the agreement will include the transfer of important GSM business with North American operators including AT&T and T-Mobile USA. The Swedish company plans to employ over 350 ex-Nortel staffers.

The move follows last week's purchase of Nortel's CDMA and LTE, assets in North America by Ericsson. Back in June the Swedish vendor had pledged to pay US$1.13 billion for these divisions. Several chunks of Nortel's assets have been sold off since the Toronto-based company filed for bankruptcy protection in January this year.



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