Ericsson headquarters in StockholmLONDON, July 27 (Reuters) – Ericsson’s last-minute bid of $1.13 billion for Nortel Network’s wireless assets is difficult to justify on sales prospects alone.
A merger won’t wring out much in the way of efficiencies either: Nortel has already undergone years of huge job cuts. 
There is, however, another factor at work here: The value of keeping competitors out.
The Swedish mobile network equipment maker snatched the Nortel business away at auction from Nokia Siemens, which last month agreed to pay $650 million for the same assets — a little over half Ericsson’s final price. 
Ericsson also significantly outbid a third bidder, private equity firm MaitlinPatterson, which offered $725 million, for Nortel. BlackBerry-maker Research in Motion is seeking a separate patent licensing deal with Nortel after its $1.1 billion offer for Nortel’s mobile business failed to win support.