Nortel Networks Corporation have entered into an asset sale agreement with Nokia Siemens Networks B. V. (NSN) for the sale of its CDMA business and LTE Access assets for US$650 million.
The agreement with NSN specifies that at least 2,500 employees would have the opportunity to continue with NSN. This represents a significant portion of the employees associated with the assets being sold.
Nortel's wireless business is the second largest supplier of CDMA infrastructure in the world. It does business with three of the five top CDMA operators globally, including Verizon Wireless, which operates the largest wireless voice and data network in the United States.
In addition to announcing this sale agreement, Nortel announced that it is advancing in its discussions with external parties to sell its other businesses. The company will assess other restructuring alternatives for these businesses in the event it is unable to maximize value through sales.
Commenting on the announcements, Nortel President and Chief Executive Officer, Mike Zafirovski said:
"Maximizing the value of our businesses in the face of a consolidating global market has been our most critical priority. We have determined the best way to do this is to find buyers for our businesses who can carry Nortel innovation forward, while preserving employment to the greatest extent possible. This will ensure Nortel's strong assets - technologies, customer relationships, and employees - continue to play an important role in driving the future of communications. The value of Nortel's wireless business is recognized throughout the industry. The agreement we are announcing today is solid proof of that value and represents the best path forward for our other businesses."
Zafirovski continued: "We also believe this will help provide clarity for our customers and employees. Customers have demonstrated consistent support for our products and services, and we want to ensure they continue to benefit from Nortel's technology and know-how. In addition, Nortel's employees are doing a tremendous job under challenging conditions, stabilizing our business and delivering outstanding service to our customers. It is important to provide our employees with a clear sense of direction around their future and potential opportunities with the new companies."
The Company will also apply to delist its common shares and the NNL preferred shares from trading on the Toronto Stock Exchange (TSX). Trading in such shares on the TSX is expected to be suspended (commencing before the opening of trading on Monday, 22 June 2009) with the consent of the Monitor under the Canadian creditor protection proceedings, pending the TSX's decision on the delisting application.