Ericsson is buying part of Nortel Networks for $US1.13 billion.
In a statement on Saturday, the Swedish telecoms manufacturer said it will take over the carrier networks division of Nortel in North America - a deal that includes contracts with Verizon and Bell Canada.
The acquisition - at an auction of Nortel assets in New York on Friday - will make North America the biggest region within Ericsson. Last year reported it sales there of $US2.7 billion.
Once the largest company in Canada, Nortel filed for bankruptcy protection in the United States and Canada in January. It was facing $US107 million in interest on its debt.
In June, an agreement was it announced for the sale most of its wireless business to Nokia Siemens Networks for $US650 million, before a court order was issued for the assets to be auctioned instead.