Is Nortel Prepping a Major Sale?

Nortel Networks Ltd. could be about to sell two of its major business divisions, according to media reports.

The Wall Street Journal reported late Wednesday that Nortel is in talks to sell its enterprise and wireless business units, which accounted for a combined $6.7 billion in sales in 2008, the publication said.

Ever since Nortel filed for its restructuring on January 14 -- a plan that included a bankruptcy filing in the United States -- some analysts have suggested the wireless division would make an attractive purchase for a rival.

The report suggests Nokia Networks might be a potential bidder for Nortel's wireless assets.

The enterprise division and the optical business -- which includes well-regarded 40-Gbit/s operations -- have also been mentioned as selloff candidates. (See Should Nortel Be Sold for Parts?, Nortel Files for Bankruptcy Protection, and Nortel Rolls On With 40-Gig.)

The WSJ listed Avaya Inc. and Siemens Enterprise Communications -- a joint venture of Siemens AG (NYSE: SI; Frankfurt: SIE) and private equity firm Gores Group LLC -- as being interested in the enterprise unit.

Nortel's already sold off its Layers 4 through 7 business -- the former Alteon Networks -- to Radware Ltd. (Nasdaq: RDWR). It tried putting the Metro Ethernet Networks (MEN) division, which includes that 40-Gbit/s franchise, up for sale in September, but drew no takers. (See Nortel to Sell Carrier Ethernet, Optical Biz, Nortel to Hold MEN, and Nortel to Offload Data Gear to Radware.)

— Craig Matsumoto, West Coast Editor, Light Reading

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