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Nortel Offers Up Its LG-Nortel Stake

Craig Matsumoto
5/27/2009

Nortel Networks Ltd. announced today that it intends to sell its majority stake in the LG-Ericsson Co. Ltd. joint venture.

Nortel is selling its stake "to secure a sound future for the LG-Nortel business," today's press release states. (See Nortel Selling LG-Nortel Stake.)

Nortel owns one share more than 50 percent of Korea-based LG-Nortel, with LG Electronics Inc. (London: LGLD; Korea: 6657.KS) owning the rest.

The Financial Times reported a month ago that Nortel might want out of LG-Nortel. Nortel's stake could be worth $500 million, according to the report.

At the same time, Nortel has made it plain that it wants to sell off some of its businesses. Possibilities include the Carrier Networks, Enterprise Solutions, and Metro Ethernet Networks (MEN) units. (See Is Nortel M&A Near?)

The joint venture is profitable, according to today's press release, although its first-quarter revenues nose-dived compared with 2008 figures. (See Nortel Stays the Course, Declares Victory.)

LG-Nortel was not included in Nortel's bankruptcy and restructuring filings in January. (See Nortel Files for Bankruptcy Protection.)

— Craig Matsumoto, West Coast Editor, Light Reading

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heretoday
heretoday
12/5/2012 | 4:04:00 PM
re: Nortel Offers Up Its LG-Nortel Stake


Some one help me here because of all the NT smoke and mirror shinanigans this has to be one of the biggest.


The "company" offers:


* Telephones and pbx/key systems/UC technology from mainly from LG


* Optical/VoIP/Wireless stuff from Nortel


* Novara EFA well.. kind of hanging in limbo between the two.  Bet you Novera guys wish you could have a do over for August 2008.


What exactly is NT selling?  Obviously LG is more than interested in their stake which  is wrapped up in their gear... which isn't leaving LG anytime soon.


The rest of the "companies" portfolio is Nortel gear.  Which will be sold off or killed.


If another party is going to buy NT's stake what are they getting?  A cute logo?


They are not going to get  a piece of what ever revenue was associated with Nortel gear.... unless they become a reseller of Nortel gear.... or LG buys the gear and gives it to the new partner to reseller.. wait this is sounding stupider than the premise of NT selling their stake of a shadow company.


So the new company won't get any of the NT gear.  Is LG going to give them a piece of their action with the gear they make?  Why?  What would the new partner bring to the table in return?


NT may think they want to sell their stake, but there really isn't anything to sell and I suspect LG would have a major say in who they partner with next.


Can't wait to hear Peter MacKinnon and the NT marketing voodoo folks make something out of this.

hundscheidt
hundscheidt
12/5/2012 | 4:03:59 PM
re: Nortel Offers Up Its LG-Nortel Stake


As far as I know, WDM-PON is the only thing that is a direct result of the JV and directly visible to us.


I know of an implementation in the Netherlands, and potentials (maybe even more). It is a small organisation that is working on it (making it "European"), but I know they are still rolling very well.


 

nortelx
nortelx
12/5/2012 | 4:03:59 PM
re: Nortel Offers Up Its LG-Nortel Stake
All good points! LG-Nortel made a substantial splash about WDM PON trials with PTT's in Europe so I'm wondering if that technology is on hold outside Korea.

Cheers
paolo.franzoi
paolo.franzoi
12/5/2012 | 4:03:58 PM
re: Nortel Offers Up Its LG-Nortel Stake
The WDM-PON was a company purchased by Nortel called Novera Optics. The primary customer is KT. That is the LG connection.

seven
paolo.franzoi
paolo.franzoi
12/5/2012 | 4:03:56 PM
re: Nortel Offers Up Its LG-Nortel Stake
Novera did the original system as well.

As far as I know it is the only deployed WDM-PON in a live network.

seven
olsen
olsen
12/5/2012 | 4:03:56 PM
re: Nortel Offers Up Its LG-Nortel Stake


LG had a WDM-PON system going long before the JV bought Novera. I do believe there was "some Novera" involved in LG's original system and because of that they bought Novera. It'll be interesting to see who wants to buy the Nortel stake and if LG will approve the buyer.


Maybe Tellabs? NSN?


Both have somewhat dropped GPON and are working towards NG-PON/WDM-PON.

heretoday
heretoday
12/5/2012 | 4:03:55 PM
re: Nortel Offers Up Its LG-Nortel Stake
The WDM-PON or EFA seems to be the only thing worth talking about. But there is NO WAY that is worth $500M dollars as the article implies. The question remains... what exactly is NT selling and what would a buyer get?... that's worth that much money?

*Maybe* the Novaro... that would likely be an LG call. So would another company benefit from the joint development of the handsets and UC application engines?... I'm sure NT hopes that's worth $500M.
olsen
olsen
12/5/2012 | 4:03:55 PM
re: Nortel Offers Up Its LG-Nortel Stake


Seven,


As I indicated, the original LG system had "Novera Inside". No wonder Novera WDM-PON got bought by the JV: IP and market penetration.


Now what? Who will pick up the Nortel part - any thoughts?

nortelx
nortelx
12/5/2012 | 4:03:37 PM
re: Nortel Offers Up Its LG-Nortel Stake


This link would suggest Hitachi has picked up Nortels part of the JV. 


http://www.canada.com/Toronto+Reorganization+talk+premature+says+Nortel/1653522/story.html

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