24/7 Wall St.’s Douglas McIntyre writes that Motorola may want to take a run at buying Nortel. With $11-billion of cash, he believes this Motorola could benefit from Nortel’s turnaround and its exposure to Wi-Max. “Nortel’s market cap is $13 billion. Perhaps Motorola could put all its cash to good use,” he concludes.
Thoughts?
It would be a good, but perhaps not great combination. I am assuming that Motorola would combine the infrastructure units, and perhaps even spin them off, and the mobile handset piece would be quite or completely separate. In this case: Both have some cash-spinning legacy infrastructure businesses. Both have programs in some promising areas like WIMAX, enterprise products, PBT ethernet, optical. The separate mobile handset piece of Motorola could “help” the infra business. Both have some strategic problems to fix. The only worry is: the combined entity would only be #1 in WIMAX, Iden, optical, no big growing cash-generating businesses. And where would Mike Z end up – he is not going to combine with Motorola and gracefully bow out for a second time?
Anon
Can’t see it happening, despite some synergies in wireless;
Both have about 20% mkt share in CDMA and could add up to match ALU, but with the market flat to declining, all you’d get is solid #2 with improved cost structure. Maybe that’s enticing enough?
On the Wimax front, I think MOT has the edge right now. On the FWA side, they purchased Nextnet last year (supplies Clearwire, Inukshuk and others). On the mobile side, they’re gearing up to supply a portion of the Sprint contract, while NT has announced trials in Taiwan and Greece.
A deal would instatnly solve NT’s mobile handset shortfall, but for now, they seem to be working that through LG.
br
I don’t get… Why would handset manufacturer buy an equipment provider?
Nah not possible.
Nortel Watcher
Whichever way you cut it and whatever Mr Z might like to “insist” upon, Nortel is dead-in-the-water. Mot-NT tie up has been looked at several times before and now NT is almost irrelevant in the market. Mot has a lot better things to do with its cash. Telecomms vendor consolidation started sometime ago and Nortel is the market’s “wallflower” for good reason – poor decisions over a long period of time driven by short-term objectives doesn’t make for a great company.
Should Motorola Buy NT?
24/7 Wall St.’s Douglas McIntyre writes that Motorola may want to take a run at buying Nortel. With $11-billion of cash, he believes this Motorola could benefit from Nortel’s turnaround and its exposure to Wi-Max. “Nortel’s market cap is $13 billion. Perhaps Motorola could put all its cash to good use,” he concludes.
Thoughts?
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