Alcatel-Lucent announced today that it has signed an agreement with Nortel to acquire its UMTS radio access business (UTRAN) and related assets for USD 320 million (Euro 250 million). This agreement follows the Memorandum of Understanding Alcatel and Nortel signed on September 1, 2006.
At the closing of the transaction, Alcatel-Lucent will acquire Nortel's UMTS radio access technology and product portfolio, associated patents and tangible assets as well as customer contracts. It will serve an additional sixteen UMTS customers around the world for a combined global footprint that amounts to one in four UMTS operators. Approximately 1,700 people will join Alcatel-Lucent, of which about 1,100 are R&D engineers, based mainly in France, Canada and China.
With this acquisition, the company will have leading positions in the whole range of wireless technologies (CDMA EVDO, UMTS/HSPA, GSM/EDGE and WiMAX), and the know-how to drive the evolution to 4G.
Michael Thelander, Signals Research Group, LLC said, "With the acquisition of Nortel's UTRAN group, Alcatel-Lucent will establish itself as a leading supplier of 3G infrastructure. The combined company will have leading market share across the ITU-defined 3G technologies (UMTS, CDMA2000 and TD-SCDMA) and a noticeable presence with virtually all major fixed and wireless operators around the world. Further, with a significantly strengthened R&D scale, and the current technical leadership and ongoing R&D efforts on next-generation technologies, such as OFDMA, SDR and MIMO, the company will be uniquely positioned to build on its strength as 3G technologies evolve and as Mobile WiMAX gains momentum. Together with Alcatel's long-standing leadership in DSL, the company is well armed to lead the development and roll-out of seamless broadband."
"Major customers have indicated their strong support for our strategic move in 3G. Once the transaction is formally closed, we will leverage the deal to its full extent, through a thorough integration program designed to bring enhanced value to our extended customer base. I am today more than ever convinced that this acquisition will generate value for the whole company and that we are set for further success," said Mary Chan, Head of Alcatel-Lucent's Wireless activities
Completion of the transaction is subject to, among other things, the conclusion of consultations with works councils and other employee representatives, finalization of the terms of certain ancillary agreements including a transitional services agreement whereby Nortel will provide to Alcatel-Lucent setup, infrastructure and application services for a defined period of time as well as customary closing conditions including regulatory approvals. The parties have agreed to target a closing at year-end.