· Secures continued development of CDMA and GSM businesses in China
· Complements existing R&D and services capabilities in the region
· Purchase price is USD 50 million
Ericsson (NASDAQ:ERIC) has today signed an agreement to acquire certain assets of the Guangdong Nortel Telecommunication Equipment Company Ltd (GDNT). The purchase is structured as an asset sale at a cash purchase price of USD 50 million on a cash and debt free basis, subject to final balance sheet adjustments. The transaction is also subject to customary regulatory approvals and other conditions.
GDNT is a leading research, development and manufacturing company based in China and an important supplier to Ericsson following the acquisitions of the CDMA and GSM businesses of Nortel. GDNT was founded in 1995 as a joint venture between Nortel, a Canadian Telecommunications Company and local Chinese corporations and telecom operators. The transaction also includes R&D facilities, manufacturing facilities as well as support and customer service in China. Some 1,100 employees, including approximately 550 R&D engineers will be integrated in to the Ericsson group over the coming months.
“We are very happy to welcome this key competence into Ericsson’s newest business unit,” said Rima Qureshi, head of Ericsson’s CDMA Mobile Systems unit. “We have built a strong foundation with the CDMA & GSM teams acquired from Nortel. With these new assets, we take control of our business by acquiring capabilities for the continued development of the CDMA & GSM businesses.”
“The acquisition greatly complements our existing R&D, manufacturing and services capabilities in the region,” said Mats H Olsson, President of Ericsson China & North East Asia. “It will no doubt allow us to provide even better support to our customers across the region who are serving one of the largest GSM and CDMA subscriber bases in the world.”
The transaction is expected to have a positive effect on Ericsson’s earnings within a year after closing.
SEB Enskilda is acting as Ericsson’s sole financial advisor in the transaction.
Pictures of Rima Qureshi and Mats H Olsson:
Previously announced information on Ericsson’s acquisitions of Nortel assets:
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Ericsson is the world’s leading provider of technology and services to telecom operators. Ericsson is the leader in 2G, 3G and 4G mobile technologies, and provides support for networks with over 2 billion subscribers and has the leading position in managed services. The company’s portfolio comprises mobile and fixed network infrastructure, telecom services, software, broadband and multimedia solutions for operators, enterprises and the media industry. The Sony Ericsson and ST-Ericsson joint ventures provide consumers with feature-rich personal mobile devices.