Nokia has bailed out flailing communications equipment maker Redback Networks by agreeing to purchase a 10% share of the company. The Finnish mobile giant will pay $35.8 million for the stake.
The new deal will bring a sigh of relief for Redback and returns the company to financial stability. On top of this obvious benefit, the new agreement will also mean that Redback will gain access to a global customer base.
Nokia Networks will cooperate closely with Redback to develop its broadband business. New product development is also on the cards. If things go well with the new alliance then Nokia may want to take advantage of its option to purchase a further 10%.