Nortel's Strange M&A Poker Game

Phillipe Morin, who heads up Nortel’s (NT) Metro Ethernet Network business, sure has a funny of way of playing M&A poker.

A week after Nortel unveiled plans to sell the $1.5-billion business, Morin told the Globe & Mail that the announcement has prompted more potential buyers to come out of the woodwork. Strange.

And now, in an interview with Jim Duffy of NetworkWorld, Morin proclaims the sale of MEN is part of Nortel’s strategic shift to become more of a software-driven business.

“Nortel is really stating that it’s now going to focus on more of an application services focus — what we basically call ICT,” he told Duffy. “When you look at MEN… it’s addressing a unique market – different from all of the other businesses at Nortel – and it’s a market that requires consolidation.”

Morin goes on to say the MEN business has “way too many players” and that “Everybody’s staring at each other saying, ‘Who’s going to pull out?’ We’ve been on that sort of path for the last three years.”

While Nortel plans to get out of the business because it’s too crowded, Duffy points out the Ethernet carrier switch market is also booming. While there are more than 20 suppliers making carrier Ethernet switches, Duffy writes the $4.6-billion market is growing at a compounded annual rate of 42.5%.

Tech Confidential’s Andrea Orr is not a fan of Nortel’s decision to sell its Metro Ethernet Network business.

Comments

[petyaczar:]

IMO = NT is a DOG, and an old DOG at that.

Too much BOW and not enough WOW

Dead money IMO

2008 Sep 28 10:03 AM