On Friday, Nortel announced that it had come to an agreement to sell most of its wireless business to Nokia Siemens Networks B. V. in a deal worth US$650 million. The deal is for Nortel’s CDMA business and LTE Access assets.
The terms of the agreement, called a “stalking horse” asset sale agreement, allow another buyer to come in with a better offer. Considering that Nortel’s CDMA unit made about US$700 million last year, if the deal sticks, Nortel could make back its investment within a year or two.
The Canadian government, through the Export Development Corp. (EDC). is contributing US$300 million in a credit facility to ensure that Nokia continues to employ at least 2,500 Nortel employees based in the U.S. and Canada.
Nortel is also planning to ask the Toronto Stock Exchange to delist its shares as it moves to sell the rest of its operations.