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Ericsson to Acquire Controlling Stake in LG-Nortel Joint Venture

3:46 pm on April 21, 2010 | Category: Business, Cellular, Corporate, Wireless Technology

Swedish network equipment giant, Ericsson, has agreed to buy Nortel’s controlling share in a joint venture with LG Electronics.

Nortel owns a 50%-plus-one-share stake in LG-Nortel Co., a venture that produces wireless telecommunications equipment for the South Korean market. Ericsson will acquire the stake in a cash deal worth US$242 million.

“Ericsson hasn’t managed to enter the Korean networks market before, and now it will get ongoing contracts and customer relationships,” commented Swedbank Markets analyst, Haakan Wranne, in Stockholm. “The price is what we could expect. It’s another piece of the puzzle to increase their Asian footprint.”

Toronto-based Nortel Networks was once North America’s leading supplier of telecommunications equipment, but fell on hard times and filed for bankruptcy protection in January 2009. Since then, it has auctioned off a number of assets, including its enterprise networking and wireless equipment divisions.

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