Thank you, Mr. Chairman.
So let me make a few comments, please.
Nortel operates, as you know, in an integrated global industry as an integrated global company. It's important, in terms of the implications, to set the stage here. We have, as of January, a number of jurisdictions where we are filed. These jurisdictions have certain considerations about how they deal with our assets and our intellectual properties. The sale of any of our businesses or any of our intellectual property rights requires the participation of all these jurisdictions--Canada, the U.S., EMEA, and the like. As a result, it's a complex equation that we have to sort through. Consequently, there is really no “Canadian only” answer to any business question here, because each of these estates has to be consulted and involved.
As you may know, the Canadian estate is in part funded by the other estates. So part of the equation that we try to solve for here is maximizing value. Preserving jobs and maximizing value is what we're trying to achieve here. Things that would interfere with either the funding of the Canadian estate or the transparency or the integrity of the process bring that into challenge. So our intent is to, in a complicated equation, maximize value and preserve as many jobs as possible.
Let me put that in the context of the global wireless industry we operate in. The global wireless industry is about $50 billion in capital expenditures. The business we're talking about today has about $2 billion in revenue. So we're about number six or number seven in that industry on the global scale.
Consolidation is a requirement in this industry. Customers have consolidated already. The vendors are continuing to face pressures to generate additional returns. Scale is a very important requirement for competition--scale in terms of R and D, scale in terms of footprint, scale in terms of balance sheet. So it's in that backdrop that we sit here today to talk about the transaction.
We went through a process, a process that was approved by the courts in both Canada and the U.S. That sales process has been overseen by our number of creditors as well. The court monitor has been involved. A range of advisers has also been involved. The courts have found conclusive evidence, supported by the monitor, that the process was properly followed, and they have approved the sale.
As I mentioned earlier, yesterday we received a document from the court here in Canada. It's worth noting that the court has reaffirmed that any party who wanted to bid for the business and complied with the bidding procedures was permitted to do so. That's an important fact to get on the record. Secondly, the court found they were satisfied that the unchallenged record clearly established that the sale process had been conducted in accordance with the bidding procedures and the guidance of the court.
So basically, we followed a process. The court was very firm with us about wanting apples-to-apples comparison of the stalking horse bid so that it was able to determine what was the best and highest value for this asset. There were objections throughout the process. Those objections were dealt with and resolved. But the courts have in fact guided us as to how to execute this process, and endorsed the process.
Our third point is that one of the comments made in the press and by others is that we have somehow utilized federal funds to develop this technology. It's important to point out that in the last 10 years, Nortel has not been able to utilize federal R and D tax credits to fund either the CDMA or the LTE technology development in Canada and the generation of related patents. Specifically, Nortel has suffered cumulative tax losses since 2001 and has not used any R and D tax credits to reduce its federal tax liabilities. As such, these technologies have not been developed by federal direct grants contributed to the company.
Fourth, on the value of these assets relative to the Investment Canada Act, we have conducted an analysis of the assets being acquired by Ericsson. The book value of these assets is $149 million U.S. That's $111 million in current assets and $38 million in fixed assets. So the total of $149 million does in fact fall below the threshold of $312 million in book value.
It's important to note the difference between book value and market value. The purchase price paid in the auction was in excess of that book value. Market values tend to be higher than book values because they capture a range of benefits in the intangibles--customer relationships, brand, intellectual property, growth opportunities, and the like. The distinction between the asset purchase price paid by the auction versus the book value is explained by that.
The other point I'd make is that the analysis was conducted in conjunction with PricewaterhouseCoopers to do the carve-out economics for the balance sheet. So we feel very good about the comment that it does in fact go below the threshold of $312 million.
The fifth point is that it's important to note that both CDMA and LTE are open standards. They are technologies developed around the world that are embraced by a number of vendors and are set by standards and committees in the industry. And in our mind in regards to any national security issue, it doesn't appear to us that this poses any significant concern. They're open standards; they're international technologies. We're not aware of any issues, but we are obviously happy to work with the government to confirm that this sale does not in fact raise any national security issues.
In addition, there has been a question about the sale of, or situation with, our remaining patents. Nortel has a very rich intellectual property portfolio. Some of these patents are being assigned to businesses, and some of them will be held for further evaluation. No process has been put forward yet for the sale of the remaining Nortel patents. Any process that we would put forward would have to be discussed with the court monitor, the credit constituencies, and be brought forward to the courts for approval, where any interested party would be able to participate in that process.
In summary, our view is that this is a good deal for Canada, as Ericsson's purchase of these Nortel CDMA/LTE assets preserves jobs, creates growth, and provides certainty for customers, partners, and employees.
And those are my remarks, Mr. Chairman. Thank you.