It is one of the very last sales of a Nortel business operation. Nortel announced Wednesday that Ericsson has offered to pay US$242 million for 50 per cent plus one share interest in a joint venture with LG of Korea.
The deal is all cash. The partnership was aimed at offering Nortel and LG products to the huge Asian market. That is why Ericsson is buying the operation in order to extend its presence in Asia.
A Nortel spokesperson told CTV Ottawa that Nortel only had about 20 employees in the operation and there is no impact in Canada. The partnership had sales of nearly $700 million in 2009, mostly in Korea.
Nortel paid $145 million to establish the partnership five years ago and it was one of the few units that managed some increased sales during the bankruptcy process. The LG-Nortel partnership had over 1,400 employees when it began.
This is the third part of Nortel that Ericsson has purchased. Previously, it has paid out a total of $1.2 billion for most of the wireless division.
There won't be any auction of the LG business unit, only court and regulatory approvals will be required. This business unit was originally set up by Nortel Canada.
The only significant assets left to sell are real estate and Nortel's large patent portfolio.
