Just goes to show what happens when you let accountants run companies...wonder who gonna buy the Enterprise gear.

The gloves are off: Nortel Networks Ltd. (NYSE/Toronto: NT) is now officially trying to sell all of its businesses.

This evening, Nortel announced a deal to sell some of its wireless assets to Nokia Siemens Networks for $650 million, the first major chunk of Nortel to land a buyer since the company went into restructuring. (See Nortel to Sell Wireless Assets to NSN and, if you somehow missed it, Nortel Files for Bankruptcy Protection.)

But the release adds that the company "is advancing in its discussions with external parties to sell its other businesses."

That does mean all other businesses, a spokesman confirms to Light Reading. But it doesn't necessarily mean Nortel, as an entity, is finished.

"Whether or not something would fall under the Nortel brand [after restructuring] would depend on the outcome of those deals," the spokesman says.

Nortel has simply decided that sell-offs are the best way to get top value for the company's technology, CEO Mike Zafirovski said in his written statement: "Maximizing the value of our businesses in the face of a consolidating global market has been our most critical priority. We have determined the best way to do this is to find buyers for our businesses who can carry Nortel innovation forward, while preserving employment to the greatest extent possible."

Since November, Nortel has been restructuring to create standalone business units, seeking "maximum flexibility to choose the ultimate path forward for each of the businesses." (See Nortel Culls 1,300 Jobs, Loses $3.4B.) But this appears to be the first time Nortel is saying that an outright sale is the best option in every case.

It's been presumed that Nortel is hearing offers for most of its major businesses anyway. (See Is Nortel M&A Near? and Is Nortel Prepping a Major Sale?)

Separately, Nortel is applying to delist its shares from the Toronto Stock Exchange, having calculated that equity holders will probably get nothing out of the bankruptcy and restructuring processes.
Oh yeah, the NSN deal
The most eye-grabbing part of tonight's news, though, is the NSN deal, the first large piece of Nortel to be sold since October, when the company first offered up its Metro Ethernet Networks business. (See Nortel to Sell Carrier Ethernet, Optical Biz.)

An NSN purchase of the wireless assets had been speculated since April. (See NSN Linked to Nortel Asset Bid and Nortel M&A Plot Thickens.)

In addition to acquiring Nortel's CDMA business -- the second largest in the world -- and its LTE access assets, NSN would offer jobs to roughly 2,500 Nortel employees.

Because Nortel is in creditor protection, the NSN bid triggers an mandatory auction process. That's why the deal is set up as a "stalking horse" deal, allowing for the possibility of higher bids. Nortel had to go through this process before selling its Layers 4 through 7 business (the former Alteon) to Radware Ltd. (Nasdaq: RDWR) on April 1. (See Nortel to Offload Data Gear to Radware and Radware Completes Nortel Buy.)

NSN doesn't expect to be outbid, it seems. An NSN corporate blog entry already talks about "maintaining Nortels Ottawa site as a center of excellence," and NSN has set up a welcome page for Nortel employees that includes a hello video -- complete with a Canada vs. Finland hockey challenge -- from chief operating officer Mika Vehviläinen. (Bonus: You learn how to pronounce his name.)

Craig Matsumoto, West Coast Editor, Light Reading


fromhttp://www.lightreading.com/document.asp?doc_id=178294...

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"Patriotism is your conviction that this country is superior to all other countries because you were born in it."
George Bernard Shaw

1 down..oops, actually 2 down!

who's next?




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Nokia Siemens snaps up Nortel's LTE and CDMA assets

Canadian government helps fund $650m purchase

Ian Williams

V3.co.uk, 22 Jun 2009

Nokia Siemens Networks has revealed plans to acquire the Long Term Evolution (LTE) and Code Division Multiple Access assets from struggling rival Nortel for $650m (£398m), thanks in part to a $300m (£183m) loan from the Canadian government.

The move is expected to help bolster Nokia Siemens' push into the LTE and North American cellular markets by adding key mobile radio access technologies and resources from Nortel.
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At least 2,500 Nortel employees across North America will be given the opportunity to move over to Nokia Siemens, and around 400 are expected to focus on LTE research and development.

"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 of Nokia Siemens.

"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. The R&D organisation in Canada would become a long-term wireless centre of excellence within Nokia Siemens Networks, complementing our other global sites."

The acquisition is being aided by the government-owned Export Development Canada, which is putting up nearly half of the money.

Verizon is conducting LTE trials in the US, and the announcement will come as welcome news to the operator.

"Verizon views today's announcement as good news for the global wireless industry," said Dick Lynch, executive vice president and chief technology officer at Verizon. "This deal brings together two important Verizon suppliers, and we look forward to our continuing work with Nokia Siemens Networks."

Nortel's current restructuring programme means that the transaction is subject to approval by the US Bankruptcy Court and the Ontario Superior Court of Justice. The normal closing conditions and receipt of necessary regulatory approvals also apply.

Barring any problems, the deal is expected to be wrapped up in the third quarter of this year.

"1 down..oops, actually 2 down!"

Who's number 2?

In the telecom gear sector I can't think of another major on death's door.

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"Patriotism is your conviction that this country is superior to all other countries because you were born in it."
George Bernard Shaw

3com, marconi. alcatel-lucent is not doing good right now. i suspect they're going down next.

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Marconi died as a serious player a long time ago, I remember having lunch with one of the guys who literally "turned off the lights" at their Canadian offices almost a decade ago.

Just because the tie up with Huawei didn't work doesn't mean 3Com is gone...if it does you might want to tell the 3Com Execs who intend to have an earnings call on the 9th!

But neither of these two are in the same league as AlcaLu, Cisco, Huawei, Nokia etc., which is what I meant by majors.

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"Patriotism is your conviction that this country is superior to all other countries because you were born in it."
George Bernard Shaw