Ericsson to buy LG-Nortel JV stake for $242 mn

SEOUL: Sweden's Ericsson has agreed to buy bankrupt Nortel's controlling stake in a venture with LG Electronics for $242 million, to get better access to the Korean telecoms equipment market.

Ericsson, the world's largest mobile network equipment maker, said the deal would boost its earnings within a year from closing.

Nortel, once North America's biggest maker of telephone gear, filed for bankruptcy protection in January and was looking for a buyer for its 50 percent plus one share in LG-Nortel.

"This acquisition will significantly expand Ericsson's footprint in the Korean market and provide Ericsson with a well established sales channel and strong R&D capability in the country," Ericsson said in a statement.

The venture -- a supplier to major Korean telecom operators such as KT Corp, LG Telecom and SK Telecom -- was set up in 2005 and had $650 million in sales last year.

LG Electronics reiterated on Wednesday that it remained committed to maintaining its strategic investor status in LG-Nortel, which will be renamed LG-Ericsson.

Nortel has said previously the venture was profitable and had not filed for creditor protection.

Goldman Sachs was advising Nortel on the sale, while SEB Enskilda was advising Ericsson.