JUNE 22, 2009 By Stephen Hardy -- On the heels of opening its share of the LG Nortel for offers and announcing on Friday a stalking-horse agreement with Nokia Siemens Networks (NSN; search Lightwave for Nokia Siemens) to offload substantially all of its LTE and CDMA assets, Nortel President and CEO Mike Zafirovski has confirmed that the rest of the company is up for sale (search Lightwave for Nortel).
The once high-flying Canadian equipment vendor filed for bankruptcy in January. While Nortel's senior management had been working to find some way of keeping the company going, Zafirovski stated that a decision has now been reached to sell off its remaining assets.
"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," Zafirovski said in a press statement. "This will ensure Nortel's strong assets -- technologies, customer relationships, and employees -- continue to play an important role in driving the future of communications. The value of Nortel's wireless business is recognized throughout the industry. The agreement we are announcing today is solid proof of that value and represents the best path forward for our other businesses."
Nortel says it is "advancing" with other divestiture discussions. Additionally, it will "assess other restructuring alternatives" for assets it can't sell.
Zafirovski told the Financial Times (registration required) that between three and seven parties had expressed interest in each of its divisions, and even more had inquired about the LG Nortel stake.
Nortel's Metro Ethernet Networks (MEN) division, which includes most of its optical communications platforms (the LG Nortel joint venture handles WDM-PON), should attract significant interest. Nortel touted the division's success within the 40-Gbps market as a bright spot during its most recent quarterly earnings call. It has also conducted several trials of 100-Gbps technology (see here and here for examples) using dual-polarized quadrature phase-shift keying with coherent detection. The Optical Internetworking Forum has adopted this approach for its 100-Gbps specifications and implementation agreements.
The stalking horse agreement with NSN for the wireless assets includes a bid of US$650 million. Because of Nortel's bankruptcy filing, the agreement with NSN merely kicks off an auction process whereby others could attempt to top NSN's bid.
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