Nortel Announces Ericsson as Successful Acquirer of Its Multi Service Switch Business

by Jeff Wiener on September 27, 2010

Just when you thought the old Nortel was gone, out comes an announcement that they have sold another business unit. Nortel announced that it has concluded a successful auction of substantially all of the assets of Nortel’s Multi Service Switch businesses globally. LM Ericsson (“Ericsson”) hasemerged as the winning bidder with a purchase price of US$65 million.

Under the terms of the agreements, Ericsson’s purchase includes substantially all assets of the MSS business globally including the associated Data Packet Network (DPN) and Services Edge Router (Shasta) product groups. These agreements also include substantially all customer contracts and certain intellectual property related to the MSS business.

The sale is subject to relevant court and regulatory approvals, including Canadian and U.S. court approvals. Nortel will work diligently with Ericsson to close the sale expeditiously, subject to the timing of regulatory required approvals.

Substantially all MSS employees will have the opportunity to continue their employment with Ericsson, including those in certain EMEA jurisdictions who will transfer to Ericsson by operation of law. The sale is also subject to certain regulatory approvals, information and consultation with employee representatives and/or employees in certain EMEA jurisdictions, other customary closing conditions and certain post-closing purchase price adjustments.

Commenting on the announcement, John Luszczek, General Manager of Nortel’s MSS business said: “Today’s announcement is welcome news for so many stakeholders – our customers, partners, suppliers and employees. It is yet another proof-point of Nortel’s ongoing commitment to preserve innovation and customer relationships that we have nurtured and grown over the past two decades.”

“Our focus now is to work closely with Ericsson to ensure as seamless a transition as possible for our customers. At the same time, we will continue to deliver the superior service that our customers have come to expect from Nortel.”

In the 1990s, Nortel built some of the largest carrier and enterprise data networks in the world, leading to the establishment of this market segment category and Nortel MSS becoming recognized as an industry leader.

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