Ericsson to buy LG-Nortel JV stake for $242 mln
Sweden's Ericsson has agreed to buy bankrupt Nortel's controlling stake in a venture with LG Electronics for $242 million, to get better access to the Korean telecoms equipment market.business Updated: Apr 21, 2010 11:41 IST
Sweden's Ericsson has agreed to buy bankrupt Nortel's controlling stake in a venture with LG Electronics for $242 million, to get better access to the Korean telecoms equipment market.
Ericsson, the world's largest mobile network equipment maker, said the deal would boost its earnings within a year from closing.
Nortel, once North America's biggest maker of telephone gear, filed for bankruptcy protection in January and was looking for a buyer for its 50 percent plus one share in LG-Nortel.
"This acquisition will significantly expand Ericsson's footprint in the Korean market and provide Ericsson with a well established sales channel and strong R&D capability in the country," Ericsson said in a statement.
The venture -- a supplier to major Korean telecom operators such as KT Corp, LG Telecom and SK Telecom -- was set up in 2005 and had $650 million in sales last year.
LG Electronics reiterated on Wednesday that it remained committed to maintaining its strategic investor status in LG-Nortel, which will be renamed LG-Ericsson.
Nortel has said previously the venture was profitable and had not filed for creditor protection.
Goldman Sachs was advising Nortel on the sale, while SEB Enskilda was advising Ericsson.
First Published: Apr 21, 2010 11:38 IST