Swedish telecom company Ericsson won the bidding war for Nortel's wireless division with a US$1.3 billion offer, the company announced Saturday.
The purchase is on a cash and debt-free basis and includes the CDMA and LTE wireless units of Nortel's Carrier Networks division.
Ericsson beat out industry giants such as MatlinPatterson and Nokia Siemens in an auction that took place Friday in New York City.
The deal still must be approved by the Canadian government and by bankruptcy courts in both Canada and the United States.
Rulings on the purchase in both courts are expected next week.
Ericsson President and CEO Carl-Henric Svanberg said the purchase would add 2,500 employees to the company, of which 400 are focused on LTE research and development.
"Acquiring Nortel's North American CDMA business allows us to serve this important region better as we build relationships for the future migration to LTE," Svanberg said in a statement.
According to the statement, the purchase gives Ericsson CDMA contracts with North American operators such as Verizon, Sprint, U.S. Cellular, Bell Canada and Leap, as well as LTE assets and some patents and patent licences relating to both CDMA and LTE.
CDMA, or code division multiple access, rivals GSM, (global system for mobile), which is the standard in the cellular industry. LTE, long-term evolution, is a newer, and potentially faster, wireless network technology.
Nortel President and CEO Mike Zafirovski expressed his support for the deal in a company statement.
"The anticipated sale of our CDMA business and LTE Access assets to Ericsson for $1.13 billion represents 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," Zafirovski said.
"I want to especially thank our customers for their tremendous support during the process, which contributed to such a positive outcome."
The deal could be scuttled if any stakeholders raise objections to the purchase.
The only objection so far has come from Research In Motion, which alleged it was shut out of the auction after it raised objections to the bidding process.
Despite its complaints, RIM made an informal bid of US $1.1 billion.
The federal government could also challenge the sale to a foreign owner, but that isn't likely to happen, said Conor Bill, managing director of Auburn Capital.
"It's hard to see the government stepping in here," he told CTV News Saturday.
Bill added that RIM could also derail the deal by making a last-minute, "blockbuster" offer, but so far there hasn't been any indication the Canadian tech giant will attempt such a deal.
"They didn't like the process," he said, regarding RIM's response to the bankruptcy proceedings.
"I think in a broader perspective, it's a sad day here in Canada," said Bill, noting that Nortel was once one of Canada's most viable brands.
"It's disappearing here with this sale, and that is kind of a tragedy for this country."
