“NEW YORK — (AP) — Nortel Networks Corp. said late Wednesday it won court approval in the U.S. and Canada to sell two of its business units.
The larger unit, Nortel’s global optical networking and carrier ethernet businesses, is going to Ciena Corp. The business is one of the most sought-after assets of Nortel, a once-dominant network gear maker that is selling itself off in pieces after filing for Chapter 11 protection in January.
The deal gives Ciena all products, contracts, and intellectual property, including technology that improves the speed and capacity of fiber optic networks.
Bankruptcy courts in Delaware and Ontario approved the deal over objections by Finnish rival Nokia Siemens Networks, which said that it would be willing to pay $810 million in cash for the business with its partner, One Equity Partners.
Ciena is paying $530 million in cash and taking on $239 million in convertible notes due June 2017.
The companies expect to close the deal in the first quarter of next year, though court approval is still needed in France and Israel.
Shares of Ciena, based in Linthicum, Md., fell 38 cents, or 3 percent, to $12.50 in premarket trading.
Nortel, which is based in Toronto, also said Thursday that U.S. and Canadian courts have approved the sale of its North American GSM business to LM Ericsson Telephone Co. of Sweden.
Ericsson is paying $70 million in cash for the mobile telecommunications unit with Kapsch CarrierCom AG of Austria, which is acquiring the assets outside of North America for $33 million.
Nortel has already sold most of its wireless network business to Ericsson for $1.13 billion.”
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Nortel Selects Ericsson and Kapsch as Successful Bidders for GSM/GSM-R Business and Completes Sale of CDMA to Ericsson
Nortel Selects Ericsson and Kapsch as Successful Bidders for GSM/GSM-R Business and Nortel Completes Sale of CDMA Business and LTE Access Assets to Ericsson.
Nortel announced that it has concluded a successful auction of substantially all of the global assets of Nortel’s GSM/GSM-R business. Telefonaktiebolaget LM Ericsson (“Ericsson”) and Kapsch CarrierCom AG (“Kapsch”) are the winning joint bidders with a purchase price of US$103 million in cash.
TORONTO – Nortel* Networks Corporation [OTC: NRTLQ] announced today that it, its principal operating subsidiary Nortel Networks Limited, and certain of its other subsidiaries including Nortel Networks Inc., have completed the sale of substantially all of Nortel’s CDMA Business and LTE Access assets to Telefonaktiebolaget LM Ericsson (Ericsson) for a purchase price of US$1.13 billion. The sale was subject to court approvals in the U.S. and Canada as well as regulatory and other customary closing conditions. These conditions have now been satisfied and the sale was concluded effective today.
“Completion of this first large-scale divestiture is a major milestone in Nortel’s plan to preserve the value of its innovation and know-how while maximizing value through the sale of its businesses,” said Pavi Binning, Chief Restructuring Officer, Nortel. “As we stated following July’s auction, the sale of our CDMA business and LTE Access assets to Ericsson represents a very positive prospect for our customers, our employees and for many of our other stakeholders. Our customers will benefit from having an experienced and financially strong partner supporting their CDMA and future LTE networks, while more than 2,500 skilled employees will now have new opportunities with a world-class technology company.”
Under the terms of the sale, Nortel will provide transitional services to Ericsson, and Ericsson will provide products and services to Nortel in support of those CDMA customers remaining with Nortel.
• Following satisfaction of all closing conditions, sale is effective end of day November 13, 2009
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