Apple-Backed Group Paying $4.5B for Nortel Patents
Along with five partners, it agrees to deal giving access to a portforlio of technologies for mobile and tablet computer use.
Apple Inc. and five bidding partners agreed to buy Nortel Networks Corp.’s remaining patents for $4.5 billion, giving them access to a portfolio of technologies used in mobile phones and tablet computers.
The bidding group included Microsoft Corp., Sony Corp. Research In Motion Ltd., Ericsson AB and EMC Corp., Ontario- based Nortel said in a statement. The companies aim to complete the sale this quarter pending approval from U.S. and Canadian courts, it said.
The purchase will give Apple and its bidding partners access to more than 6,000 patents and applications in areas including the Internet and chips from a company that was once North America’s largest maker of phone equipment. The winning bid trumped the $900 million Google had offered before the auction for Nortel’s remaining intellectual property.
“The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio, among major companies around the world,” Nortel said in the statement. “The portfolio touches nearly every aspect of telecommunications and additional markets as well, including Internet search and social networking.”
Research In Motion, maker of the BlackBerry smartphone, will pay about $770 million for its share of the patents, the Waterloo, Ontario-based company said in a statement. Ericsson will pay $340 million, the Stockholm-based networking-equipment maker said.
Higher-Than-Expected Bid
The patents fetched more than the $3 billion Nortel previously raised for creditors by selling almost all its businesses. The patents also were sold at four times the $1.1 billion estimated in May by Peter Conley, managing director of Santa Monica-based MDB Capital Group LLC, which specializes in intellectual property.
Nortel filed for bankruptcy in 2009 after posting a $5.8 billion annual loss as the global recession prompted customers to delay purchases.
Google had sought the patents partly to bolster its Android operating system, used in handsets made by Samsung Electronics Co., HTC Corp. and Motorola Mobility Holdings Inc. Chipmaker Intel Corp. and Rockstar Bidco LP last month received U.S. Federal Trade Commission approval to bid for the patents.
“This outcome is disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition,” Mountain View, California-based Google said in an e-mail. “We will keep working to reduce the current flood of patent litigation that hurts both innovators and consumers.”
Court approvals will be sought at a joint hearing expected to be held July 11, Nortel said.
--With assistance from Victoria Batchelor in Sydney and Adam Satariano in San Francisco. Editors: Young-Sam Cho, Michael Tighe
To contact the reporters on this story: Steven Church in Wilmington at schurch3@bloomberg.net; Hugo Miller in Toronto at hugomiller@bloomberg.net; Tim Culpan in Taipei at tculpan1@bloomberg.net.
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.
