Ericsson to Bid for Nortel's Wireless Network Assets in Auction

Strategic Insights -

Swedish telecommunications equipment vendor L.M. Ericsson Telephone Co. is set to compete in an auction for Nortel Networks Corp.'s wireless network assets, against Nokia Siemens Networks and an affiliate of MatlinPatterson Global Opportunities Partners III LP. Ericsson has declined to reveal the price it is prepared to pay, stating it will only pursue the deal if the price is reasonable. The company's move comes as Nortel, which filed for Chapter 11 protection earlier this year, had agreed to sell its wireless business to Nokia Siemens Networks in June.

Key Takeaways:

  • L.M. Ericsson Telephone Co. will bid for Nortel Networks Corp.'s wireless network assets in an auction scheduled for Friday.
  • Ericsson will compete against Nokia Siemens Networks, a joint venture between Nokia Corp. and Siemens AG, which has previously bid $650 million for the assets.
  • An affiliate of MatlinPatterson Global Opportunities Partners III LP bid $725 million for the assets on Tuesday.
  • Ericsson has not disclosed the price it is prepared to pay, but stated it will pursue the deal only if the price is reasonable.
  • Nortel had agreed to sell its wireless business to Nokia Siemens Networks in June, but the sale is subject to approval from the bankruptcy court.
  • Research In Motion Ltd. had previously bid $1.1 billion for Nortel's wireless business, but was blocked by Nortel on procedural grounds.
  • The auction process is part of the court-supervised bidding process to determine whether the assets can fetch a higher price.

Statistics:

  • $650 million: Nokia Siemens Networks' previous bid for Nortel's wireless networks unit.
  • $725 million: Affiliate of MatlinPatterson Global Opportunities Partners III LP's bid for the wireless network division.
  • $730 million: Reported figure of Ericsson's bid for the wireless network division, cited by sources familiar with the court-supervised bidding process.
  • $1.1 billion: Research In Motion Ltd.'s bid for Nortel's wireless business, which was blocked on procedural grounds.

Sources:

  • Globe and Mail
  • Reuters, "Ericsson to bid for Nortel's wireless network assets - sources"
  • Businessweek, "Nortel's Wireless Unit Draws New Suitors"
  • CBC News, "Nortel to sell wireless business to Nokia-Siemens"