Tuesday, November 24, 2009

Nortel Break Up so far

The following information is reported on the Canadian NRPC website:

At this point Nortel has succeeded in finding buyers for the majority of the company. Here is a summary of the sell-off so far, in each case finalized by an auction process with 2 or more bidders in each auction.

1. Ericsson bought the current CDMA and future LTE wireless businesses of Nortel on July 25, for US$1.13bn. As more than one article described things, these were the crown jewels of Nortel.

2. Avaya bought the Corporate Networks division (many of us knew this as "enterprise"), on Sept. 14 for US$900million.

3. Hitachi bought some of Nortel's software and technology for next-generation packet core networks, on October 26 for US$10million.

4. Ciena just yesterday (Nov. 23), at the end of a 3-day auction process, bought Nortel's Optical Ethernet business for US$769million. This is a business in which Nortel was third in the world in sales last year, after Huawei and Alcatel-Lucent. But notably Nortel was the world leader in sales of next-generation 40 and 100 Gb systems, with about 40% market share recently from sales of a little under $1bn last year.

Still to come is the sale of Nortel's GSM business, for which Nortel said it hopes to announce a schedule later this week. One likely bidder is Nokia-Siemens, who came in a close second in bids for the first and fourth sales, for the CDMA and Optical Ethernet businesses. Nokia-Siemens are often considered anxious to become more established in the North American market, so probably remain interested in picking up part of Nortel's wireless business.

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