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Ericsson acquires part of Guangdong Nortel R&D firm

Ericsson has signed an agreement to acquire certain assets of the Guangdong Nortel Telecommunication Equipment Company Ltd (GDNT).


December 8, 2010  


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Ericsson has signed an agreement to acquire certain assets of the Guangdong Nortel Telecommunication Equipment Company Ltd (GDNT).

The purchase is structured as an asset sale at a cash purchase price of US$50 million on a cash and debt free basis, subject to final balance sheet adjustments. The transaction is also subject to customary regulatory approvals and other conditions.

GDNT is a research, development and manufacturing company based in China and an important supplier to Ericsson following the acquisitions of the CDMA and GSM businesses of Nortel.

It was founded in 1995 as a joint venture between Nortel Networks and local Chinese corporations and telecom operators. The transaction also includes R&D facilities, manufacturing facilities as well as support and customer service in China. Some 1,100 employees, including approximately 550 R&D engineers will be integrated in to the Ericsson group over the coming months.

“We have built a strong foundation with the CDMA & GSM teams acquired from Nortel. With these new assets, we take control of our business by acquiring capabilities for the continued development of the CDMA & GSM businesses,” said Rima Qureshi, head of Ericsson’s CDMA Mobile Systems unit. 

The transaction is expected to have a positive effect on Ericsson’s earnings within a year after closing.