Swedish telecom giant Ericsson has emerged as the winner in the bidding war for Nortel Networks Corp.'s wireless division with a purchase price of $1.13 billion US, Nortel said in a statement early Saturday.
A Nortel building is shown in Ottawa. An auction in New York City on Friday follows Nortel's slide into bankruptcy protection early this year (Tobin Grimshaw/Canadian Press) The auction at the New York office of Nortel's lawyers on Friday follows the beleaguered Canadian tech company's slide into bankruptcy protection early this year after the company concluded that its breakup and sale was the best way to deal with its debt.
The bid is subject to court approvals in the U.S. and Canada, as well as the federal government.
Nortel's creditors, who will receive the money from the asset sale, will also have a big voice in the outcome.
In the statement, Mike Zafirovski, Nortel's president and CEO, called the anticipated sale "a very positive prospect for our customers who will be able to continue their relationships with a long-term partner, for employees who will have new opportunities at Ericsson and for many of our other stakeholders."
The bidding started in June, when Nortel said it had a $650 million "stalking horse" offer from Finnish-based Nokia Siemens. That bid established a bottom limit, which subsequent offers would have to beat.
Since then, two other bids surfaced, while Canada's Research in Motion has launched a bitter campaign about the process, claiming it was frozen out and trying to get the federal government to intervene.
Industry Minister Tony Clement initially said he would not interfere, but later said government officials are looking into whether the government might be able to restrict the sale of Nortel assets, Reuters reported Friday.
Finance Minister Jim Flaherty said: "What we want to see is a level playing field. We don't want to see anyone excluded from the process with respect the sale of the assets of Nortel."
But any decisions about Nortel are up to Clement, he said.
There was also speculation that RIM could team up with one of the bidders who has been admitted to the auction, either before or after a sale is done. And there is always the prospect of a legal challenge to the process.
With files from The Associated Press
