Nice move on this news:
Tuesday April 4, 4:26 pm Eastern Time
UPDATE 1 - Solectron to buy some Nortel plants
(recasts, adds new details throughout)
NEW YORK, April 4 (Reuters) - Customized electronics maker Solectron Corp. said on
Tuesday it plans to buy some Nortel Networks Corp. operations in North America and
Europe for $900 million and supply parts and services to the Canadian equipment maker
under a $10 billion contract.
Milpitas, Calif.-based Solectron will acquire Nortel's (NYSE:NT - news) (Toronto:NT.TO - news) new product
introduction prototyping, printed circuit board and telephone set assembly plants in North America and Turkey. It also plans
to buy some European operations.
Solectron then will provide manufacturing and repair services for Nortel's optical, carrier, enterprise and wireless products
under a four-year contract. Nortel will become Solectron's biggest customer.
``This announcement is part of Solectron's core strategy to continue to expand our business units, capabilities and presence
in the telecommunications industry,' said Solectron Chairman Ko Nishimura.
Amid broad market weakness, shares of Solectron slipped 1/2 to 38-3/4, while Nortel lost 12-3/4 to 107-1/4 on the New
York Stock Exchange.
The announcements complete Nortel's 15-month effort to shed or outsource non-core businesses and cut 10 percent of its
workforce. Nortel has been shifting its focus toward fast-growing markets such as optical and data networking.
Nortel has been pitted in a fierce battle against rivals such as Lucent Technologies Inc. and Cisco Systems to provide the
products that handle increasing Internet traffic.
Under terms of the deal, about 4,200 Nortel employees will be transferred to Solectron.
Solectron will acquire Nortel's operations in Calgary, Canada, Research Triangle Park, North Carolina, Monterrey, Mexico,
and Istanbul, Turkey.
The company is also in talks to acquire operations in Northern Ireland and Cwmcarn, Wales and part of Nortel's
Matra-Nortel Communications S.A.S. joint venture in France.
The deals are expected to close later this year. |
