Canada’s Federal Industry department investigates if the US$4.5bn sale of Nortel’s patent portfolio should be scrutinised under foreign investment rules.
Canadian Industry minister Christian Paradis said in a statement that he was looking at whether the…
Canada’s Federal Industry department investigates if the US$4.5bn sale of Nortel’s patent portfolio should be scrutinised under foreign investment rules.
Canadian Industry minister Christian Paradis said in a statement that he was looking at whether the purchase by a consortium of tech giants was subject to review under the Investment Canada Act (ICA).
The consortium of buyers comprises Apple, Ericsson, Microsoft, RIM, Sony and data storage provider EMC.
According to ICA regulation foreign acquisitions of more than C$312m (US$324m) must be reviewed and deemed to be of “net benefit” to the Canadian economy.
Dow Jones Newswires reports that sources familiar with the situation have said the sale may not meet the as the patent portfolio was valued at zero on Nortel’s books.
Ronald Gruia, telecom analyst at Frost & Sullivan, argued that the patent sale was positive for Canada: “The deal is at least a silver lining as RIM are getting some of the patents, along with Ericsson who employ a lot of engineers in Canada,” he said.
Nortel had hoped to close the deal in Q3, following their entry into bankruptcy protection in 2009.
There has been speculation in recent months that the new Canadian government, which has a Conservative majority, will relax Canada’s strict foreign ownership rules for telcos.
Meanwhile, the deal has also come under pressure in the US with the American Antitrust Institute demanding an investigation from the Department of Justice as it fears the buyers could use the patent portfolio to suppress competitors in the wireless sector.
