Google offers to buy Nortel patents for $900 million
Fallen telecom giant Nortel said on Monday that Google is bidding $900 million to buy its patent portfolio.
Toronto-based Nortel, which has been in business since 1882, filed for bankruptcy last year after suffering losses to the tune of $ 5 billion in 2009 during a troubled decade.
The 129-year-old telecom giant's accumulated problems - from the bubble burst to internal accounting scandal to the current meltdown - forced it to seek bankruptcy protection in the US and Canada January 2010.
After this, it started selling off its various divisions to pay its debtors.
It is now selling its last remaining asset - a huge inventory of about 6,000 patents related to cutting-edge, next-generation wire technology.
The patent portfolio touches nearly every aspect of telecommunications and additional markets as well, including Internet search and social networking, according Nortel.
In a statement, Nortel said that "it, its principal operating subsidiary Nortel Networks Limited (NNL) and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Limited (in administration), have entered into a stalking horse asset sale agreement with Google Inc. for the sale of all of Nortel's remaining patents and patent applications for a cash purchase price of US$900 million."
Google's stalking-horse' offer will be the opening bid of what Nortel called "a robust auction" likely to fetch it a higher price.
The 'stalking-horse' agreement with Google includes sale of approximately 6,000 patents and patent applications spanning wireless, wireless 4G, data networking, optical, voice, internet, service provider, semiconductors and other patent portfolios.
Nortel said the agreement follows "a confidential, multi-round bidding process involving several interested companies and consortia from around the world."
According to George Riedel, chief strategy officer and president of business units at Nortel, "This is an unprecedented opportunity to acquire one of the most extensive and compelling patent portfolios to ever come on the market.
"We look forward to what we hope will be a robust auction, following the requisite court approvals, currently expected to be held in June 2011."
The Google offer for Nortel patents assumes significance as the Internet search engine giant is entering other areas including telecom as devices running on its Android operating system are fast snatching market from Apple, BlackBerry maker Research In Motion (RIM), Nokia and Microsoft.
At its peak as the world's top telecom company, Nortel employed 90,000 people worldwide.
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