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Ericsson Buys Telecom Research Firm For $1.2 Billion

Sweden based mobile-phone maker Ericsson AB is going ahead with its proposed purchase of Telcordia Technologies, a leading US based brand, known for its services in the telecommunication research and development sector.

Reports suggest that Ericsson will pay approximately $1.2 billion, making this Ericsson's largest deal in the last 5 years.

The deal, according to many observers, will enhance Ericsson’s software and service support offerings to a great extent.

Ericsson also revealed that it had reached an agreement with Warburg Pincus LLC and Providence Equity Partners in order to buy out all of Telcordia with a debt-free, all-cash transaction.

The deal, which is likely to be closed during the fourth quarter of this year, will add over 2500 employees to Ericsson’s existing work-force.

“Telcordia has a good position with fixed operators and Ericsson is strong in mobile and other domains of the network so together we can create a strong position,” said Jan Frykhammar, the chief financial officer in Ericsson AB, Bloomberg reports.

Investors are also giving their approval to this new acquisition as the shares of the company registered 1.7 percent growth during the trade day in Stockholm yesterday.