Nokia Siemens Networks will buy wireless technology company Nortel Networks for $ 650 million.
Nortel, a former telecommunications equipment giant, filed for Chapter 11 bankruptcy in January with the hope of reorganization.
Nokia Siemens said Friday that use Nortel’s CDMA and LTE technology to expand its presence in North America. CDMA, multiple access or code division, is one of the two networks operating in the U.S. and is used by Verizon Wireless and Sprint. LTE or Long Term Evolution, is the 4G wireless technology that may replace today’s mobile networks.
“This agreement provides an important strategic opportunity for Nokia Siemens Networks to strengthen its position in two key areas, North America and LTE, at a price that makes good economic sense,” said Nokia Siemens CEO Simon Beresford-Wylie in a statement.
As part of the agreement, about 2,500 employees of Nortel in the U.S., Canada, Mexico and China can keep their jobs. Nortel officials said represent a “significant part” of workers associated with that part of your business.
“Maximizing the value of our businesses against the consolidation of a global market has been our top priority. It has determined the best way to do this is to find buyers for our business that can lead to innovation Nortel forward, keeping the employment to the greatest extent possible, “said Nortel CEO Mike Zafirovski said in a statement.
Toronto-based Nortel also said it is working on selling other parts of your business and ask to be delisted from the Toronto Stock Exchange.
The agreement with Nokia Siemens, which is expected to close in the third quarter, must be approved by the U.S. Bankruptcy Court and the Ontario Superior Court of Justice.
Nortel was founded in 1895 as Northern Electric and telecommunication equipment manufacturing and supply of Canadian telephone system. At the height of their success 10 years ago, Nortel has been a $ 250 billion (£ 150 billion) and had more than 90,000 employees.