Ottawa Gives A-OK to Ericsson Deal

Like AAN hasbeen saying all along, the Canadian government has given its approval to Ericsson’s (ERIC) $1.3 billion purchase of Nortel’s (NT) CDMA business and its LTE R&D unit.

“There are no grounds to believe this transaction could be injurious to Canada’s national security,” Industry Canada Minister Tony Clement said. “[Ericsson] has the resources and customer base necessary to bring Canadian innovation to market…. This deal is very beneficial to Canada.”

Translation: The business and assets that Ericsson purchased aren’t leading-edge and, as a result, there was no way Ottawa could justify blocking the deal.

A more important angle – and one AAN has been hammering away on – is that the stage is now set for Ottawa to step in when Nortel’s LTE patents eventually go on the block. Politically, the Canadian government can claim that the LTE patents are of “national interest” because they will play a crucial role in next-generation wireless networks.

The real possibility that Ottawa could take this stance may scare away potential foreign bidders, which – surprise, surprise – would leave Research in Motion as the logical (Canadian) purchaser.

This is what RIM has been seeking. It didn’t want the CDMA business or the LTE R&D unit; it wants the LTE patents because whoever controls them will have a huge competitive edge. If RIM wants to do LTE R&D, it can hire some of Nortel’s employees, including the 100 talented ones now looking for work.

For more, check out the Globe & Mail.

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shareschina.net

Sep 18 10:52 AM