The transaction gives Nokia Siemens the opportunity to strengthen its presence in North America and secures for the company key R&D employees in the area of long term evolution products or LTE, the wireless technology that has been embraced by major telecom companies like Verizon Inc. The deal is expected to close sometime in July, according to Nokia Siemens.

"This agreement provides an important strategic opportunity for Nokia Siemens Networks to strengthen its position in two key areas, North America and LTE, at a price that makes good economic sense," said Simon Beresford-Wylie, chief executive officer of Nokia Siemens Networks in a statement.

"It also represents stability for Nortel's existing customers and offers a great opportunity for employees to move into a stable future with an industry winner," added Beresford-Wylie. "The R&D organization in Canada would become a long-term wireless center of excellence within Nokia Siemens Networks, complementing our other global sites."

The acquisition marks the end of a long road for Canada's Nortel, once one of the world's biggest communications equipment vendors. The company filed for bankruptcy reorganization in January and has since been trying to sell some of its assets.

As part of the transaction, Nokia Siemens said it will receive a loan commitment totaling $300 million from Export Development Canada, the government-owned export credit agency. The move would help ensure Nokia Siemens keep many of Nortel's current facilities in Canada upon closing the deal.

The transaction is subject to approval from regulatory authorities in the United States and Canada where Nortel has filed for bankruptcy reorganization. On closing, 2,500 Nortel employees in Canada, the United States, Mexico and China will join Nokia Siemens, the company said.

Nokia Siemens is a joint venture between Finland's Nokia Corp., the world's biggest mobile phone manufacturer, and Siemens A.G., Germany's industrial and technology giant. The JV is based in Espoo, Finland.