Light Reading is reporting that Nortel may be taking a serious run at Tellabs – a deal that would cost it $4.5-billion based on Tellabs’ current market capitalization.
One source told Light Reading that a Nortel-Tellabs combination makes sense because there is very little product overlap, and Tellabs had technology that could give Nortel’s optical portfolio a much-need update. Tellabs also has some interesting wireless technology that could be used as backhaul.
I’m not sure that Nortel is in good enough shape to be going after multi-billion $ companies, but I have more confidence in the optical strategy than the other portfolios. Philipe Morin was born and raised in the optical business and is an example of what I commonly refer to as a Subject Matter Expert who doesn’t depend on others for strategy input and who also has a track record of execution success. If this deal goes ahead, it might be a good thing.
Timur
What would be the justification of NT buying Tellabs? I just don’t see it solving NT’s strategic question… what new business will NT get into or develop that will create $100m of profit over the next 5 years?
Tellabs looks more like a cost synergy play that Zman would feel comfortable with but fundamentally would not solve any strategic questions.
The real answer must be to focus on Enterprise and dispose or cash cow the various carrier businesses. Maybe the Avaya deal might re-open given turmoil in the debt markets??
Tellabs + NT = loser + loser
Disgruntled Ex Nortel
Ask yourself a simple question, If Tellabs is the be all and end all to a Telecom future, why haven’t we seen it as the subject of a bidding war between all the major Telecom equipment players??
The more likely scenario is Nortel being acquired by either Motorola or Ericson
Nortel-Tellabs?
Light Reading is reporting that Nortel may be taking a serious run at Tellabs – a deal that would cost it $4.5-billion based on Tellabs’ current market capitalization.
One source told Light Reading that a Nortel-Tellabs combination makes sense because there is very little product overlap, and Tellabs had technology that could give Nortel’s optical portfolio a much-need update. Tellabs also has some interesting wireless technology that could be used as backhaul.