SEOUL, Korea -LG Electronics [KSE:06657.KS] and Nortel* [NYSE/TSX: NT] today announced the signing of a Memorandum of Understanding (MoU) to establish a joint venture for providing high quality, leading edge telecommunications equipment and networking solutions to Korea and other markets globally.
The announcement of the proposed 50-50* joint venture framework was made in Seoul by S.S. Kim, CEO and Vice-Chairman of LG Electronics and Bill Owens, president and chief executive officer of Nortel.
This impending cooperation supports the strategies of both companies for ongoing development of leadingedge telecommunications equipment and networking solutions to ignite and power global commerce. The proposed joint venture also reflects the companies' commitment to leverage best-in-class resources and expertise by joining forces with leading telecommunications players in key markets.
"To be a global communications provider, it is imperative for us to expand our market share and compete in Asia," Owens said. "Establishing a relationship with a world-class company is an important step. Korea is known for advanced and trailblazing technology in communications as it leads the rest of the world in
embracing technology that enhances the human experience."
"Nortel is a true powerhouse in the world's telecommunications equipment market with strong technology and global competitiveness," said S.S. Kim. "LG Electronics is a top-notch telecommunication equipment and solutions provider, attested by its being the first in the world to provide a WCDMA system with video telephony in late 2002. Our joint-venture with Nortel is expected to create greater synergy between LG Electronics' cutting-edge technology and Nortel's expertise in delivering communications capabilities. We are confident that it will become one of the top-ranking players in the global telecommunications equipment market."
"Our intent is to invest in Korea to leverage the wealth of strong R&D talent and technology steeped in LG Electronics and Nortel to develop products and solutions for the global market," said John Giamatteo, president, Asia Pacific, Nortel. "We also intend for the proposed joint venture to market the entire Nortel
portfolio of optical, wireless, wireline and enterprise products in Korea and, based on mutual discussion, in other markets as well."
"Telecommunications equipment is very closely related to mobile phones in development," said Mun Hwa Park, President, Mobile Communications Company, LG Electronics. "In developing hi-tech mobile phones, LG Electronics will collaborate with Nortel to be better positioned in setting standards for next-generation devices and developing technologies. Based on this, LG Electronics is expected to reduce the developing time for next-generation terminals and maintain its leading technology in global mobile phone market."
The proposed joint venture is subject to execution of a definitive agreement. The two companies expect to complete this transaction in the second quarter of 2005.
*In the proposed joint venture, Nortel has 50 percent plus one share.
About LG Electronics
LG Electronics (Korea Stock Exchange:06657.KS), headquartered in Seoul, South Korea, was established in 1958 and has grown into a global force in electronics, information and communications products with annual total revenues of US$ 29.9 billion (consolidated). With more than 64,000 employees working in 73 overseas subsidiaries and marketing units around the world, LG Electronics is comprised of four main business companies including Digital Display, Digital Media, Digital Appliance, and Mobile Communications. LG Electronics' goal worldwide is to create and enable the intelligent networking of digital products that will make consumers' lives better than ever. For more information, please visit www.lge.com.
About Nortel
Nortel is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.
*Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.
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