Nortel Networks Corp. has accepted a $650 million bid to sell the most lucrative part of its carrier networks division, together with a wireless research unit, to Nokia Siemens Networks, people familiar with the matter said Friday.
Toronto-based Nortel has struggled to sell off its assets since entering bankruptcy protection in January, as customers looked elsewhere for equipment upgrades and the value of its assets dropped.
The offer, known as a stalking horse bid, is subject to an auction to see if a higher bid emerges, as required by bankruptcy regulations.
A Nortel spokesman declined to comment.
Nokia Siemens, a joint venture of Nokia Corp. and Siemens AG, is offering to buy the unit making a voice technology called CDMA, which is deployed by major U.S. carriers including Verizon Wireless and Sprint Nextel Corp. The deal could give Nokia Siemens the foothold it has long sought in the U.S., as it would acquire one of the largest bases of CDMA customers in the world.
Under the proposed deal, Nokia Siemens would also buy a 400-person research unit developing radio technologies for an ultra-high-speed broadband technology known as LTE. Verizon Wireless, Vodafone PLC and other major global carriers are planning to roll out the so-called fourth-generation technology in coming years.
Nokia Siemens, the world's second-largest maker of wireless network equipment by sales, after Telefon AB L.M. Ericsson, wants to raise its chances of being selected as a supplier for LTE rollouts around the world. Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone PLC, has selected two other suppliers for its LTE rollout but has left open the possibility of selecting a third vendor, if the vendor were willing to take over Nortel's CDMA business, according to people familiar with Verizon's thinking.
Nokia Siemens in March first made an unsolicited bid to buy large parts of Nortel's carrier networks division for $850 million. The current deal is more limited in scope.
The deal would involve the transfer of 2,500 Nortel employees to Nokia Siemens, which would establish a wireless research center in Canada, the people said.
