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Nortel-Motorola in Wireless Talks
By Mark Evans | February 11, 2008
According to the Wall Street Journal, Nortel and Motorola may be in discussions to merge their wireless business - a deal that would create a $10-billion unit. The news comes on the heels of Motorola’s announcement last month that it was looking at dumping its money-losing handset business.
One question: why stop at the wireless business given both companies are also intent on going after the enterprise market. Why not talk about a complete merger? Sure, it would be complicated and the integration risks would be high but perhaps - and I stress perhaps - 1 + 1 = 3 in an industry where the competitive landscape is intense and economic conditions are volatile.
For more, check out the Globe & Mail, which suggests Nortel has “more to lose in making a deal, but less to offer”.
Update: In a research note, Oppenheimer & Co. said the deal would be good news for Motorola. “We view the news as a positive for Motorola. It’s clear the company is making greater efforts to unlock the value of its business units and potentially exit businesses that lack good long-term growth prospects as a stand-alone business,” they said in a note.
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