In 1998, Nortel made an ambitious move by spending $9.1-billion to acquire Bay Networks. Nortel CEO John Roth heralded the acquisition as a key part in Nortel’s enterprise and data strategies.
“We could see a major change coming in our industry,” Roth declared. “This merger of Nortel and Bay is really a creation that is the first of its kind.”
For a variety of reasons, the deal didn’t work – much like many of the multi-billion dollar deals made while Roth was CEO.
In a blog post, Teledynamic Communications president Randy Kremlacek contends the Bay deal was beginning of the end for Nortel.
However, a horribly overpriced acquisition of Bay Networks marked a turning point in the late 90’s. They couldn’t decide if they were a voice company or a data company. Whether they wanted to concentrate on what they did best or be all things to all people.
I also remember shortly afterward Nortel did get US trade support (sorry can't find a link). This was shortly after Lucent got a multi-billion dollar Saudi telecom contract essentially as a precondition to getting F-16s. (Showing how valuable that can be.)
By by the 90s Bell Canada simply could not support Nortel. The model was unsustainable. Unfortunately it was too ingrained in Nortel's corporate culture.
Was Bay the Beginning of the End?
In 1998, Nortel made an ambitious move by spending $9.1-billion to acquire Bay Networks. Nortel CEO John Roth heralded the acquisition as a key part in Nortel’s enterprise and data strategies.
“We could see a major change coming in our industry,” Roth declared. “This merger of Nortel and Bay is really a creation that is the first of its kind.”
For a variety of reasons, the deal didn’t work – much like many of the multi-billion dollar deals made while Roth was CEO.
In a blog post, Teledynamic Communications president Randy Kremlacek contends the Bay deal was beginning of the end for Nortel.
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