Whither Nortel? To the competition…

Back in January, in writing about Nortel’s trip to bankruptcy court, I commented that one possible outcome might be that the company break itself up into pieces and that a likely acquirer for the enterprise unit might be Siemens Enterprise Communications.

According to an article in the Wall Street Journal, Nortel may be in talks right now to do just that – and possible acquirers of the enterprise unit include not only Siemens but Avaya.  Nortel has several strong businesses, including its wireless unit, which has continued to see strong sales from U.S. mobile operators, and the enterprise unit, which despite the company’s travails, has a strong customer base and equally strong sales.

The company’s fate may not be determined yet for months but the bankruptcy process in the U.S., as well as in Canada, requires the company to seek the most value for its creditors, so ultimately this scenario may play out.  The Journal article reported that one possible purchaser of the wireless unit might be Nokia Siemens, a joint venture of Nokia and Siemens.  If Nortel’s assets were swallowed whole by the two units Siemens AG spun off, the irony would not be subtle.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

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