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Nortel Networks Corp. has reached a deal to sell its wireless unit to Nokia Siemens Networks for $650 million (U.S.).

The agreement, announced late yesterday, specifies at least 2,500 employees "would have the opportunity to continue" with Nokia Siemens, Nortel stated in a release.

Nokia Siemens is buying Nortel technology called code division multiple access, or CDMA, and long term evolution, known as LTE.

The deal, known as a "stalking horse sale agreement," confirms earlier reports that Nokia was among the rumoured bidders for the assets of the now-bankrupt former telecommunications giant.

"This will ensure Nortel’s strong assets – technologies, customer relationships, and employees – continue to play an important role in driving the future of communications," Nortel chief executive Mike Zafirovski stated in the release.

“We really believe this is good for Canada,” Sue Spradley, head of North America for Nokia Siemens Networks, said in an interview business cards on sale. “We absolutely believe this is very complementary for the market, for the employees, and we really want to remain in Canada and be a significant global player here.”

Toronto-based Nortel filed for bankruptcy protection in Canada and the United States in January after racking up losses of $7 billion over two years. The company, which has announced plans to fire 5,000 employees this year, or about 15 per cent of its workforce, has until July 30 to file a restructuring plan.

A "stalking horse" agreement is designed to coax other potential buyers out of the shadows. If Nokia Siemens were outbid for the wireless assets in a court-supervised auction, it would be entitled to a breakup fee plus expenses.

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