Canada has decided against launching a review of the $1.13 billion sale of the wireless assets of bankrupt Nortel Networks to Sweden's Ericsson, Industry Minister Tony Clement said on Wednesday.
I am satisfied that the assets sold fall well below the threshold required for a review under the Investment Canada Act, Clement said at a press conference in Toronto.
Based on all the information presented to me and to the government, there are no grounds to believe that this transaction could be injurious to Canada's national security.
Clement said the Canadian dollar book value of the assets being sold was about C$182.5 million ($171 million), well below the C$312 million threshold that would trigger a review under the act.
He also pointed to Ericsson's history of significant investments in research and development in Canada.
Nortel and Ericsson both said late on Wednesday they were pleased with Clement's announcement and were working to close the deal.
BlackBerry maker Research In Motion had opposed the deal, unveiled in July. It covets Nortel's next-generation LTE -- or long-term evolution -- wireless patents, which are being licensed to Ericsson as part of the transaction but not sold outright.
The Waterloo, Ontario-based company has argued it was effectively prevented from bidding on them by Nortel. RIM has also waved the Canadian flag, saying the sale of Nortel assets to a foreign company is not in the country's best interest.
Nortel, once North America's biggest maker of telecom equipment, filed for bankruptcy protection in January, blaming the economic crisis for derailing its turnaround efforts.
The company later decided it could generate more value for creditors by selling off its operations in pieces rather than trying to restructure itself into a viable business.
On Wednesday, U.S. and Canadian judges approved the sale of Nortel's enterprise business to U.S.-based Avaya Inc for about $900 million.
When asked whether the Avaya transaction would also be considered for a review, Clement replied: I and my officials are currently examining the situation and we'll have more to say in the future.
The left-leaning opposition New Democrats, whose support the minority Conservative government will need to survive an expected non-confidence motion next month, condemned Clement's decision.
It's terribly disappointing for Canadians as well as Nortel employees and this country ... there are some national security issues here, said spokesman Brian Masse. The party had called for a review of the deal.
The main opposition Liberal Party, which wants to bring down the government as soon as possible over its handling of the economy, said it was very, very disappointed. The Liberals had also wanted a review of the deal.
(Additional reporting by Jeffrey Hodgson, David Ljunggren and Mia Shanley; editing by Peter Galloway and Rob Wilson)