Canada Reviews Sale of Nortel Patents to Foreign Consortium

Strategic Insights -

Canada is reviewing the sale of 6,000 Nortel patents to a foreign consortium led by Apple, worth $4.5 billion, to determine if it violates national interest. The sale, announced on July 1, has raised concerns as the patents are related to cutting-edge, next-generation wireless technology. This is the third foreign takeover of Canadian companies or assets to face review by the government, following the government's block of the sale of Potash Corporation of Saskatchewan to BHP Billiton last November and its review of the London Stock Exchange's takeover bid for the Toronto Stock Exchange.

Key Takeaways:

  • The sale of 6,000 Nortel patents to a foreign consortium led by Apple is worth $4.5 billion, making it the biggest sale of patents in history.
  • The Investment Canada Act mandates review of any foreign takeover of Canadian assets above $350 million to safeguard national interest.
  • Canadian Industry Minister Christian Paradis has sought a review of the sale to determine if it violates the Investment Canada Act.
  • Research In Motion (RIM), the maker of BlackBerry, which is part of the consortium that bought the patents, had previously opposed the sale of Nortel's wireless assets to Ericsson on nationalist grounds.
  • The Nortel patents are related to cutting-edge, next-generation wireless technology, making them a valuable asset for the consortium.
  • The review is the third foreign takeover of Canadian companies or assets to face scrutiny by the government, following the block of the sale of Potash Corporation of Saskatchewan to BHP Billiton and the review of the London Stock Exchange's takeover bid for the Toronto Stock Exchange.

Statistics:

  • The sale of Nortel patents is worth $4.5 billion.
  • The sale involves 6,000 patents and patent applications.
  • The Investment Canada Act has a threshold of $350 million for reviewing foreign takeovers of Canadian assets.
  • The government has blockaded the sale of Potash Corporation of Saskatchewan to BHP Billiton for $39 billion.
  • The review of the London Stock Exchange's takeover bid for the Toronto Stock Exchange is ongoing.

Sources:

  • IANS India Pvt. Ltd
  • Syndigate.info an Albawaba.com company
  • Hindustan Times