Ericsson, a provider of technology and services to telecom operators, has entered into a share purchase agreement to acquire Nortel'smajority shareholding in LG-Nortel, the joint venture of LG Electronicsand Nortel Networks.

The transaction however is subject to customary regulatory approvals.

Officials with Ericsson (News - Alert) said that this acquisition will significantly expand company's footprint in the Korean market and provide Ericsson with a well established sales channel and strong R&D capability in the country.

Company officials said that the acquisition will also provide Ericsson with an industrial base and the ability to build new customer relationships.

The joint venture includes important contracts with Korean operators such as KT (News - Alert), LG Telecom and SK Telecom.

The new joint venture, to be known as LG-Ericsson, will become one of the major telecom players in Korea.

'Korea is one of the largest telecom markets with advanced end-user demand of new services. A strengthening of our position through the collaboration with our new partner LG Electronics will enhance our position for future technology shifts such as LTE,' said Hans Vestberg (News - Alert), president and CEO of Ericsson.

Yong Nam, vice chairman and CEO of LG Electronics said Ericsson will provide global industry experience and technical expertise that will benefit both customers and employees.

"We look forward to a fruitful future collaboration,' said Nam.