Nortel Offers Up Its LG-Nortel Stake
Nortel Networks Ltd. announced today that it intends to sell its majority stake in the LG-Ericsson Co. Ltd. joint venture.
Nortel is selling its stake "to secure a sound future for the LG-Nortel business," today's press release states. (See Nortel Selling LG-Nortel Stake.)
Nortel owns one share more than 50 percent of Korea-based LG-Nortel, with LG Electronics Inc. (London: LGLD; Korea: 6657.KS) owning the rest.
The Financial Times reported a month ago that Nortel might want out of LG-Nortel. Nortel's stake could be worth $500 million, according to the report.
At the same time, Nortel has made it plain that it wants to sell off some of its businesses. Possibilities include the Carrier Networks, Enterprise Solutions, and Metro Ethernet Networks (MEN) units. (See Is Nortel M&A Near?)
The joint venture is profitable, according to today's press release, although its first-quarter revenues nose-dived compared with 2008 figures. (See Nortel Stays the Course, Declares Victory.)
LG-Nortel was not included in Nortel's bankruptcy and restructuring filings in January. (See Nortel Files for Bankruptcy Protection.)
— Craig Matsumoto, West Coast Editor, Light Reading