Ericsson is reported to be poised to acquire another piece of the once-mighty Nortel Networks. According to South Korean media reports, Ericsson and South Korea's LG are preparing to announce that Ericsson is picking up Nortel's former stake in LG-Nortel.
Ericsson has already acquired Nortel's most valuable unit -- its CDMA/LTE operation -- for $1.13 billion, so the Swedish company has some familiarity and links with LG-Nortel.
In its latest financial report, LG-Nortel had revenue of $154 million. The sales were influenced by LG-Nortel's relationship with LGN Carrier. The fourth-quarter report stated that the $154 million revenue figure represented a decrease of 24% from the fourth quarter in the previous year, but the revenue figure represented an increase of 50% sequentially.
Nortel has been selling off its assets ever since it filed for bankruptcy in January 2009. Its major remaining asset -- not including its 50.1% ownership of LG-Nortel -- is its portfolio of some 3,000 CDMA/LTE patents. The patent portfolio is said to be worth about $1 billion. Several companies, in particular Nortel's Ontario neighbor Research In Motion, have long coveted Nortel's intellectual property. RIM has had to shell out more than $1 billion for licensing payments in past years.
As of Thursday, the involved companies -- LG, Nortel, and Ericsson -- have not confirmed the reports. The Seoul Economic Daily publication said the announcement of an Ericsson-LG deal is expected to be made Friday.
Ericsson is a major wireless networking infrastructure provider and claims to be the largest LTE provider after its acquisition of Nortel's CDMA/LTE unit last year. LG is a conglomerate providing products and services in a myriad of industries. Its global handset market share has been growing rapidly and it has said it plans to be a major provider of smartphones by 2012.