Nortel Saga: Will Ericsson Wireless Buy Go Through?

The fallout from Ericsson’s pending, $1.13 billion bid for most of Nortel Networks Corp.’s (NT) wireless assets has begun.

First, there’s a chance the Canadian government could block the deal if there’s not enough benefit to Canada. Tony Clement, the country’s industry minister, told reporters on Monday that he hasn’t decided whether to intervene in the sale process. He’s waiting for the bankruptcy courts to make their next move, according to Canwest News Service.

A lot has been made of a Nortel sale to a foreign competitor. Nortel has ranked as the foremost tech company in Canada for years, so ceding ownership to an outside firm is problematic for many people, from ex-employees to government officials.

Finally, there also was word on Monday that BlackBerry maker Research In Motion (RIMM) is working to buy some wireless patents that weren’t included in the asset sale to Ericsson.

If RIM is successful, it will have future-proofed its business and avoided licensing skirmishes later, a Research Capital analyst told Reuters.

“They can save on royalty costs and I think it’s also going to be a benefit on the margins,” Nick Agostino told the wire service.

Nortel wasn’t talking. RIM, though, reiterated on Sunday it still wants to acquire some of Nortel’s property. The company didn’t get specific, but the rumored talks are interesting in light of RIM’s complaints last week that Nortel wouldn’t let it take part in the July 24 wireless assets auction.


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