(InfoWorld) - LG Electronics and Nortel Networks sealed the deal Wednesday on a telecommunications network equipment joint venture that was first announced in January of this year, they said.

The deal, which was signed on Wednesday in Seoul by LG Electronics CEO Kim Ssang-Soo and Nortel CEO Bill Owens, creates a jointly owned company tentatively called LG-Nortel Co. that will combine LG's telecommunication infrastructure business and Nortel's distribution and service businesses in South Korea.

Equipment developed by the company will be offered globally.

Nortel will own 50 percent plus 1 share of the company in return for contributing the South Korean businesses, $145 million and other non-monetary considerations, which were not specified. The remainder of the company will be in LG's hands.

The two businesses recorded revenues of 600 billion won ($590 million) in 2004, the two companies said.

Closure of the deal is expected within the year and is subject to regulatory approval.

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