Nokia Siemens Networks has revealed plans to acquire the Long Term Evolution (LTE) and Code Division Multiple Access assets from struggling rival Nortel for $650m (£398m), thanks in part to a $300m (£183m) loan from the Canadian government.
The move is expected to help bolster Nokia Siemens' push into the LTE and North American cellular markets by adding key mobile radio access technologies and resources from Nortel.
At least 2,500 Nortel employees across North America will be given the opportunity to move over to Nokia Siemens, and around 400 are expected to focus on LTE research and development.
"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, chief executive of Nokia Siemens.
"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 organisation in Canada would become a long-term wireless centre of excellence within Nokia Siemens Networks, complementing our other global sites."
The acquisition is being aided by the government-owned Export Development Canada, which is putting up nearly half of the money.
Verizon is conducting LTE trials in the US, and the announcement will come as welcome news to the operator.
"Verizon views today's announcement as good news for the global wireless industry," said Dick Lynch, executive vice president and chief technology officer at Verizon. "This deal brings together two important Verizon suppliers, and we look forward to our continuing work with Nokia Siemens Networks."
Nortel's current restructuring programme means that the transaction is subject to approval by the US Bankruptcy Court and the Ontario Superior Court of Justice. The normal closing conditions and receipt of necessary regulatory approvals also apply.
Barring any problems, the deal is expected to be wrapped up in the third quarter of this year.
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