Ericsson (NASDAQ:ERIC) today officially closed its acquisition of Nortel’s CDMA business and long-term evolution assets, allowing it to assume the mantle of largest telecom equipment vendor in North America.
The acquisition will add 2500 new employees to Ericsson’s ranks, most of them in Nortel’s wireless division HQ in the Dallas area and its R&D facilities in Ottawa, but also in China. They will join Ericsson’s wireless operations in the Dallas area, its San Jose-based IP division (formerly Redback Networks and Entrisphere) and the 6000 Sprint (NYSE:S) employees who will come over to Ericsson as part of its network management outsourcing deal with the CDMA operator. The resulting operations will make North America Ericsson’s largest market, surpassing even Europe in total revenues, as well as make it the largest telecom equipment vendor in the region, surpassing even Franco-American rival Alcatel-Lucent (NYSE:ALU)
“We’re now engaged with all of the major operators in North America,” said chief technology officer Hakan Eriksson, who last week announced his plans to relocate to San Jose to head up its IP business and raise Ericsson’s executive profile in the US. “We’ve gone from having a few thousand people in North America to–with the Nortel deal and the Sprint outsourcing contract–having around 14,000 employees. That makes it the largest group in Ericsson outside of Sweden.”
Ericsson paid $1.13 billion for the assets, which Nortel was forced to sell while in Chapter 11 bankruptcy. Compettor Nokia Siemens Networks (NYSE:NOK, NYSE:SI) made the intial move on Nortel’s assets, bidding $650 million for its CDMA and LTE divisions. A bidding war ensued, however, which Ericsson wound up winning.