Ericsson buys $242m LG-Nortel stake

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One of Nortel’s last operations, its joint venture with South Korea’s LG to make mobile equipment, is being bought by Ericsson

Nortel Networks is selling its 50% stake in its joint venture with Korea’s LG to Ericsson for $242 million in cash. LG-Nortel will be renamed LG-Ericsson.
The partnership will enhance the Swedish vendor’s position for future technology moves. SEB Enskilda is acting as Ericsson’s financial advisor. The deal is subject to regulatory and court approvals.
LG-Nortel’s focus has been to develop and market telecom systems such as WCDMA, CDMA and LTE for service providers in South Korea. The joint venture has contracts with KT, LG Telecom and SK Telecom.
Hans Vestberg, CEO of Ericsson, said: “Korea is one of the largest telecom markets with advanced end-user demand of new services. A strengthening of our position through the collaboration with our new partner LG Electronics will enhance our position for future technology shifts such as LTE.”
In July 2009, Ericsson and the Korean government agreed to cooperate in developing 4G technology. LG-Ericsson is expected to continue this initiative.
LG-Nortel generated about $650 million of sales and had 1,300 employees in 2009. The joint venture will continue to be headquartered in Seoul.
The sale is believed to be one of the last disposals of businesses that were part of the bankrupt Nortel. GTB