Ericsson continued to wrap up its Nortel acquisition today with the purchase of the operator’s majority stake in a joint venture with LG.
The LG-Nortel joint venture will now be called LG-Ericsson. The $242 million deal will expand Ericsson’s footprint in the Korean market and includes contracts with Korean operators including KT, LG Telecom and SK Telecom.
“Korea is one of the largest telecom markets with advanced end-user demand of new services. A strengthening of our position through the collaboration with our new partner LG Electronics will enhance our position for future technology shifts such as LTE,” said Ericsson President and CEO Hans Vestberg in a statement.
The joint venture was originally established in 2005 when LG Electronics and Nortel agreed to combine their respective telecommunications systems and Korean distribution businesses.
The joint venture developed and marketed technologies like CDMA and LTE to Korean operators. It also developed enterprise products and services. The business posted sales of $650 million last year.
Ericsson said its 51 percent stake in the joint venture would have a positive effect on its earnings within a year of the deal’s close.