Nortel Networks and LG Electronics today agreed to set up a telecoms equipment venture in South Korea that will give the Canadian firm a bigger presence in fast-growing Asian markets.
The deal will effectively give Nortel half of LG's infrastructure business ranging from optical to wireless and next-generation network products in return for helping to finance its expansion.
The venture, to be called "LG-Nortel Networks", is part of a strategy by Nortel to seek new areas of growth.
Nortel has a significant R&D facility in Galway and a supply chain centre in Monkstown, Northern Ireland.
Nortel said it would own 50 per cent plus one share in the joint venture and LG the rest.
LG, a small player in telecoms infrastructure, will transfer its relatively low margin telecoms gear business into the venture, while Nortel will bring fresh investment. The chief executive will come from LG and the chief financial officer from Nortel, it said.
The firm expects the transaction to close in the second quarter of 2005.