Tags : Ericsson, Nortel Network, technology, wireless business
Clement Clears Nortel Network’s Sale Of Wireless Business To Ericsson
Ottawa, Ontario (AHN) – Despite pressure from frustrated bidder Research in Motion and Canadian lawmakers for Ottawa to block the sale of Nortel Network’s wireless business, Industry Minister Tony Clement ruled otherwise.
Clement explained to qualify for federal interview a transaction must be worth at least $312 million under the rules and threshold values of the Investment Canada Act.
Although the deal – approved earlier by a Canadian Federal Court and a U.S. Bankruptcy Court – was for $1.13 billion, Clement pointed out in a statement: “Based on materials prepared and validated by two public accounting firms and in light of the testimony presented before the House of Commons Standing Committee on Industry, Science and Technology, I am satisfied that the assets being sold fall below that threshold.”
Clement added, “Based on the information presented to me, there are no grounds to believe that this transaction could be injurious to Canada’s national security.”
Blackberry-maker RIM opposed the sale of Nortel’s wireless business because Canadian taxpayers’ money was partly used to fund the development of the technology which could end up in foreign hands.
Clement said the sale protects jobs and intellectual property in Canada through the inclusion of a non-exclusive licensing agreement for some of the Long Term Evolution wireless technologies to Ericsson. But the property rights to these patents remain with Nortel, a Canadian company facing bankruptcy proceedings.
The industry minister said, “With a stellar reputation in the Canadian ICT sector – and in research – Ericsson also has the resources and customer base to bring Canadian innovation to market. This deal is beneficial to Canada and will help Canada compete on the world stage.
Clement’s decision came after Nortel sold this week its enterprise assets to Avaya Communication for $900 million. The sale was opposed by Verizon Communications because of the risk American federal agencies would face. Bid winner Avaya has indicated it will not assume Nortel’s contract with Verizon, which manages the Nortel equipment used to service U.S. federal agencies, including the military.
The sale of Nortel’s enterprise assets is also subject to U.S. and Canadian courts’ approval.
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