Ericsson will buy Nortel's R&D and services joint venture in China for $50 million.
The vendor has announced the acquisition of Guangdong Nortel Telecommunication Equipment Company (GDNT) in an all-cash transaction.
GDNT - which provides GSM and CDMA equipment and services - was founded in 1995 as a joint venture between Nortel and Chinese shareholders, including local carriers. Nortel owns 62% of the company.
Ericsson will receive all GDNT's R&D and manufacturing facilities, as well as support and customer service facilities. The deal involves the transfer to Ericsson of around 1,100 staff, half of which are R&D engineers.
Ericsson has already bought Nortel's CDMA and GSM assets for $1.13 billion. Ericsson has become a key GDNT customer since this 2009 acquisition, the company said in a statement.
Ericsson expects the deal, which still requires approvals, to have a positive effect on earnings within a year of closing. Its Nasdaq shares rose 2.42% to $10.32 yesterday.