Nortel Wireless Winner: It's Ericsson!
Because Ericsson announced today that it was the winner of Friday's auction, putting up $1.13 billion in cash for Nortel's CDMA and LTE assets.
And by "today," we do mean today. Ericsson made the announcement just after midnight Eastern on Saturday, July 25. (See Ericsson Wins Nortel Wireless Auction.)
Ericsson's bid still has to be accepted by the bankruptcy court, and it's also subject to regulatory approval. (See Auction Day for Nortel.)
Ericsson's victory could come as a surprise to some. Nokia Networks -- the original bidder for the wireless assets -- seemed to need Nortel's North American presence more. (See Ericsson Bids for Nortel Wireless Assets and The Spoilers of War.)
But Ericsson seems tickled pink. "This deal, along with our recently announced [Sprint Corp. (NYSE: S)] service agreement, truly positions Ericsson as a leading telecoms supplier in North America," Ericsson CEO Carl-Henric Svanberg said in his prepared statement. (See Ericsson, Sprint in $5B Managed Services Deal.)
The Nortel purchase would turn North America into Ericsson's largest business region, with 14,000 employees, the company said. (Ericsson would pick up 2,500 Nortel employees -- a number that was a condition of the Nokia Siemens offer.)
The deal would also give Ericsson deeper relationships with big carriers, as it would inherit CDMA contracts with Sprint, Verizon Wireless , U.S. Cellular Corp. (NYSE: USM), BCE Inc. (Bell Canada) (NYSE/Toronto: BCE), and Leap Wireless International Inc. (Nasdaq: LEAP).
It's unknown how many bidders were at the auction. But in addition to Nokia Siemens, private equity firm MatlinPatterson Global Advisors LLC was there and had expressed interest in keeping Nortel intact. (See PE Firm Edges NSN's Nortel Bid.)
Ericsson will discuss its winning bid during a press conference to be held Monday at 10:00 a.m. Eastern time.
— Craig Matsumoto, West Coast Editor, Light Reading