Curtains finally fell on one of Canada’s leading corporate houses as Nortel announced that it has agreed to offload the CDMA and LTE assets to Nokia Siemens Networks for a value of $ 650 million. The move will result in 2500 employees of Nortel shifting loyalties to NSN.

Terming the deal as "stalking horse" asset sale agreement Nortel said the deal was to ensure that ultimately the value of its businesses are maximized. The value of $ 650 million however do not reflect the value which the company would have aimed for few years back when it was one of the most valued companies not only in Canada but across the globe.

The company was forced to file for bankruptcy earlier this year and ever since it was expected that the company will have to sell some of its business units to tide over the crisis. But the new development suggests that the company will end up selling all its important business verticals. Competitors are also eying its enterprise division.

Commenting on the announcements, Nortel President and Chief Executive Officer, Mike Zafirovski said, "Maximizing the value of our businesses in the face of a consolidating global market has been our most critical priority. We have determined the best way to do this is to find buyers for our businesses who can carry Nortel innovation forward, while preserving employment to the greatest extent possible.  This will ensure Nortel's strong assets - technologies, customer relationships, and employees - continue to play an important role in driving the future of communications.  The value of Nortel's wireless business is recognized throughout the industry.  The agreement we are announcing today is solid proof of that value and represents the best path forward for our other businesses."

Zafirovski continued: "We also believe this will help provide clarity for our customers and employees. Customers have demonstrated consistent support for our products and services, and we want to ensure they continue to benefit from Nortel's technology and know-how.  In addition, Nortel's employees are doing a tremendous job under challenging conditions, stabilizing our business and delivering outstanding service to our customers.  It is important to provide our employees with a clear sense of direction around their future and potential opportunities with the new companies."

The company also said that it will apply to Toronto Stock Exchange to Delist Shares and Expects Creditor Protection Proceedings Will Ultimately Result in Cancellation of Shares.

Nortel said that its CDMA business was the second largest supplier in the world with 2 of the top 5 global operators being its customers. This should work well in favour of NSN which is not present that strongly in the CDMA segment.

If successfully completed, this transaction would give many of our CDMA customers a clear roadmap for the future evolution of their networks and the opportunity to extend their relationship with a long-term partner. Further, we expect that a significant portion of the employees associated with the assets being sold would be able to continue their innovative work,” said Richard Lowe, President, Carrier Networks, Nortel.

For NSN which is now focusing on profits margins and is very selective on which contracts to accept, the acquisition gives access to some multi-year contracts held by Nortel especially in the North American market and LTE segment.

 "This agreement provides an important strategic opportunity for Nokia Siemens Networks to strengthen its position in two key areas, North America and LTE, at a price that makes good economic sense," said Simon Beresford-Wylie, CEO of NSN. "It also represents stability for Nortel's existing customers and offers a great opportunity for employees to move into a stable future with an industry winner. The R&D organization in Canada would become a long-term wireless center of excellence within Nokia Siemens Networks, complementing our other global sites."

2500 employees of Nortel mainly from Ottawa in Canada, Dellas in USA and some from China as well as Mexico will rollover to NSN.

Existing customers of Nortel including Verizon, Bell, Sprint Nextel and TELUS welcomed the move. Nortel’s India clients include Airtel, BSNL and Reliance Communications.

Nortel has also announced plans to exit its JV with LG earlier. There were reports that former executives of the company are planning to come together to help the firm tide over the crisis.