Nortel, ANTEC to Combine Cable Businesses
Wednesday October 18 9:47 AM ET
TORONTO (Reuters) - Nortel Networks Corp. (NYSE:NT - news) (Toronto:NT.TO - news) and ANTEC Corp. (NasdaqNM:ANTC - news) said on Wednesday they would combine their high-speed cable access businesses into one company to advance their ability to build Internet connectivity over coaxial cable networks.
The new company will acquire Nortel Networks ownership interest in Arris Interactive, created in 1995 by ANTEC and Nortel to develop cable Internet delivery systems, and in turn be renamed Arris Inc.
Nortel Networks said it will transfer to the new company its 81.25 percent interest in Arris Interactive in return for 33 million shares of common stock in the new company and approximately $325 million in cash.
Nortel will own about 46.5 percent in the new firm while ANTEC, which currently owns the remaining 18.75 percent of Arris Interactive, will become a subsidiary of the new company,
Suwanee, Georgia-based Arris Interactive develops products that allow residences to receive telephone calls and Internet service over coaxial cable while ANTEC uses these products to design and build the actual network.
``This realignment will give the combined business the depth of skills and resources to lead its market,'' said Steve Pusey, vice-president of Nortel and chairman of Arris Interactive.
``And it will enable Nortel Networks to focus on building a set of local Internet solutions with the speed, performance, reliability and economics to conquer the 'last mile' bottleneck,'' added Pusey.
In the first half of 2000 about half of Arris Interactive revenue of $254 million was from the sale of its products to ANTEC, said the companies in a statement.
The transaction is expected to be neutral to Nortel Networks' earnings per share from operations in calendar year 2001 and should close in the first quarter of 2001. |
