Toronto, July 29 (Inditop.com) Even as courts in Canada and the US Tuesday approved Ericsson’s $1.13-billion bid last week to acquire the wireless business of Nortel, the 127-year-old Canadian corporate icon, political leaders here are putting pressure on the government to stop the sale.
Once a world leader in telecom equipment technology, Nortel is selling all its businesses to pay back its creditors after suffering $5-billion losses last year. Toronto-based Nortel has been operating under bankruptcy protection in Canada and the US since January.
It decided to sold itself off after posting further losses of $500 million this year.
Its next-generation wireless business went under the hammer last week, with Ericsson outbidding Nokia Siemens and American private equity firm MatlinPatterson.
Putting their stamp on the Ericsson deal Tuesday, judges in Toronto and Delaware said they were satisfied with the price that Nortel and its creditors got at the auction.
The judges also ruled out objections by BlackBerry maker Research In Motion (RIM) that it was unfairly shut out of the bidding process.
After being shut out of bidding, the BlackBerry maker had urged the Canadian government to stop the auction in “national interest.”
Called Long Term Evolution (LTE), Nortel’s next-generation wireless technology will allow carriers to offer cell phones with advanced features such as online gaming and video streaming.
“For all of those reasons, I am very enthusiastically prepared to enter the sale order in this matter,” American judge Kevin Gross said while putting his seal on the deal in conjunction with a Toronto court via a videolink.
However, Canadian opposition leaders joined ranks to put pressure on the government to stop the Nortel assets from falling in foreign hands. Michael Ignatieff, leader of the opposition Liberal Party, and Jack Layton, leader of the smaller New Democratic Party (NDP), called for an emergency session of parliament to stop the sale.
Said Ignatieff, “This intellectual property that Nortel had, that was built up of taxpayers’ money, is just so important and so valuable for the future of wireless technology around the world.”
Added Layton, “We are fortunate to have some real success stories in this country and our government should be working to help success stories to succeed.”
But Canadian industry minister Tony Clement refused to say whether the government will intervene to stop the Nortel sale.
He said, “We have laws in this country, we will apply those laws fairly.
“We welcome foreign investment, we continue to do so. We continue to obtain foreign investment, that is a good thing for our economy, but we also expect foreign investors to abide by the laws of the land.”
Under the deal, Nortel is selling nearly 600 patents to Ericsson.
But lawyers for Nortel told the court that these patents don’t include Long-term Evolution or LTE.
The lawyers said the LTE patents will be sold later with other patents under another court-supervised auction, and Canadian companies could bid for them.
