Ericsson Consortium Wins Nortel Patent Portfolio With $4.5 Billion Bid
Swedish telecommunications gear vendor Telefon AB L.M. Ericsson
(ERIC) said Friday that as part of a consortium it has won the bid
for Canada's Nortel Networks Corp.'s (NRTLQ) remaining patents and
The total cash purchase price amounts to $4.5 billion, of which
Ericsson's contribution is $340 million, with the rest made up from
the other members of the consortium that includes Apple Inc.
(AAPL), EMC Corp. (EMC), Microsoft Corp. (MSFT), Research In Motion
Ltd. (RIMM) and Sony Corp. (SNE).
The purchased patent portfolio includes around 6,000 patents and
patent applications in telecommunications, internet search and
social networking, and covers mobile, long term evolution and data
networking as well as optical, internet, service provider,
semiconductors and other patent portfolios, the company said in a
Google Inc. (GOOG) had originally made a "stalking horse" bid on
the patents of $900 million in April and the auction itself was
delayed by a week after Nortel said it had seen a "significant
level of interest" in the portfolio.
"We believe the consortium is in the best position to utilize
the patents in a manner that will be favorable to the industry long
term," Kasim Alfalahi, Ericsson's Chief Intellectual Property
The deal is expected to close in the third quarter of 2011,
following approval by the United States and Canadian Bankruptcy
Nortel filed for bankruptcy in 2009, and has been selling off
assets in bankruptcy court since.
Among other asset sales, Ericsson bought Nortel's CDMA business
for $1.1 billion in 2009, Avaya purchased Nortel's enterprise unit
in 2009 for $900 million, while Ciena Corp. (CIEN) bought the metro
ethernet business in 2010 for $774 million.
SEB Enskilda is acting as financial advisor to Ericsson in the
Shares in Ericsson closed Thursday at SEK91.20.
-By Dominic Chopping; Dow Jones Newswires; +46-8-5451-3093;