Louise Nordstrom, Associated Press WriterSTOCKHOLM -- Swedish wireless equipment maker LM Ericsson ( ERIC) on Saturday said it had penned a deal to buy a majority of Nortel Networks' ( NRTLQ.PK) North American wireless business for $1.13 billion. The Stockholm-based group said the purchase is on a cash and debt-free basis and covers the older CDMA and newer LTE wireless businesses of Nortel's Carrier Networks unit.
CDMA, or code division multiple access, is a rival standard to the dominant cellular standard GSM, or global system for mobile, while LTE, or long-term evolution, is a next-generation wireless network technology that promises to be much faster. In 2008, Ericsson's North American business generated around $2.7 billion of sales. The group said that including its recent services agreement with Sprint, Saturday's deal will make North America its largest region, with around 14,000 staff. Ericsson expects the acquisition to have a positive effect on its earnings within a year after closing, it said. Magnus Mandersson, currently head of Ericsson Northern Europe, has been named President of Ericsson CDMA operations, and Richard Lowe of Nortel the chief operating officer. In a separate statement, Nortel said it would "work diligently" with Ericsson to close the sale later this year. It also said it would stay focused on finding the right buyers for its other businesses.