Google bids $900 million for Nortel patent portfolio

by CXOtoday Staff    Apr 05, 2011

patent purchaseNortel Networks announced today that it has entered into a stalking horse asset sale agreement with Google for the sale of all of its remaining patents and patent applications for a cash purchase price of US$900 million. The agreement includes the planned 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. The extensive patent portfolio touches nearly every aspect of telecommunications and additional markets as well, including Internet search and social networking.

“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,” remarked George Riedel, chief strategy officer and president, Business Units, Nortel.

This agreement follows a confidential, multi-round bidding process involving several interested companies and consortia from around the world.

Nortel informed it will file the stalking horse asset sale agreement with the United States Bankruptcy Court for the District of Delaware along with a motion seeking the establishment of bidding procedures for an auction that allows other qualified bidders to submit higher or otherwise better offers, as required under Section 363 of the U.S. Bankruptcy Code. A similar motion for the approval of the bidding procedures will be filed with the Ontario Superior Court of Justice. Following completion of the bidding process, final approval of the U.S. and Canadian courts will be required.

“Nortel selected our bid as the ’stalking-horse bid’ which is the starting point against which others will bid prior to the auction. If successful, we hope this portfolio will not only create a disincentive for others to sue Google, but also help us, our partners and the open source community—which is integrally involved in projects like Android and Chrome—continue to innovate. In the absence of meaningful reform, we believe it’s the best long-term solution for Google, our users and our partners,” cites Kent Walker, Sr VP & General Counsel, Google.

In addition to the processes and approvals outlined above, consummation of the transaction is subject to the satisfaction of regulatory and other customary conditions.

As previously announced, Nortel does not expect that the company’s common shareholders or the NNL (Nortel Networks - subsidiary) preferred shareholders will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.