Company News

UPDATE 3-Nokia Siemens says could bid for other Nortel units

* Says willing to consider acquiring other Nortel assets

* Says CDMA/LTE deal could close in Q3 (Adds comments from MatlinPatterson spokesman. In U.S. dollars)

TORONTO, July 14 (Reuters) - Nokia Siemens, which has bid for the advanced wireless technology assets of bankrupt Canadian telecom equipment maker Nortel Networks, is open to acquiring other Nortel assets as they are put on the market, a senior company official said on Tuesday.

“Right now our focus is on the CDMA and LTE (wireless networks) assets, we want to get that process through the gate. If other assets come on to the market, we will look at each one for their value and if there is something there, we will do a deal,” said Sue Spradley, the head of Nokia Siemens North America.

“But, it needs to have the right value for us and make sense given our customers,” she told a gathering hosted by the Economic Club of Canada.

Last month, Nokia Siemens Networks -- a joint venture of Nokia NOK1V.HE and Siemens SIEGn.DE -- made a $650 million "stalking horse" bid to acquire Nortel's advanced wireless technology business. The Nokia Siemens bid sets a floor, if any competing offer tops this bid, Nokia Siemens will be given an opportunity to raise its bid.

The deal would allow Nokia Siemens to expand its presence in North America and make it a leading supplier of wireless infrastructure products in the region.

Toronto-based Nortel, once the largest North American telecommunications equipment manufacturer, filed for bankruptcy protection in January, blaming the economic crisis for derailing a turnaround effort that began in 2005.

Nokia Siemens has a very small presence in Canada at present, but its footprint in the country will grow dramatically if it is successful in its bid for the Nortel assets.

“The acquisition of the Nortel assets will give us the opportunity to continue to grow. We do not see this as an opportunity to seek synergies (cut jobs),” said Spradley, who is a former Nortel employee.


Earlier this month, private equity firm MatlinPatterson Global Advisors confirmed it has plans to put forward a comprehensive proposal to reorganize the businesses of Nortel.

MatlinPatterson, a major bondholder and Nortel creditor, said it does not believe that the proposed sale of Nortel’s key wireless technology unit to Nokia Siemens Networks maximizes value for Nortel stakeholders.

Spradley poured cold water on suggestions that Nortel could reorganize and emerge from bankruptcy in some form, arguing that a company needs to have significant scale to be successful in the telecom equipment makers industry right now and Nortel by itself would be unable to compete.

The telecom equipment industry has been consolidating and leaving only a few global players -- market leader Ericsson ERICb.ST, Huawei [HWT.UL], Nokia Siemens and Alcatel-Lucent ALUA.PA.

“I more than anybody would like to save Nortel. But if it could have been saved we all would have done that years ago,” she said, adding that the Nokia Siemens proposal offers more job security to Nortel’s employees than any bid from a private equity firm will.

MatlinPatterson has retained Dion Joannou, former president of Nortel North America, in connection with its efforts to table an alternative proposal.

A spokesman for MatlinPatterson reiterated on Tuesday that it is working to put forward a proposal that would permit Nortel to reorganize and emerge from bankruptcy as a reinvigorated, independent company.

Spradley said the combination of the Nortel wireless assets with those of Nokia Networks, will allow Nortel to focus on innovation again and drive the development 4G LTE technology.

This technology will enable high-speed wireless downloads and is intended to replace current mobile networks. LTE networks are slated to be deployed in the coming years by large wireless carriers including Vodafone Group Plc VOD.L and Verizon Communications Inc VZ.N.

Spradley expects LTE networks to initially be adopted in Japan and the Unites States, the rollout in Canada is likely to take much longer as network operators here are currently investing in 3G networks.

“This acquisition is not about letting go of employees, our intention is to make Ottawa the global center for our 4G LTE technology and we intend to add more R&D work at the center.” (Reporting by Euan Rocha; editing by Peter Galloway)