Today, Nortel will be sold off bit by bit. The auction will occur not in public but in an executive suite, where lawyers and CEOs will fight over the remaining scraps of the once-giant Canadian infrastructure company.
There is plenty of blame to go around for the demise of the 114-year old company. Some analysts and industry insiders point to financial scandals and strategic mismanagement. Others point to poorly-planned acquisitions, lack of focus and prioritizing profits over quality. From the executive side, fingers have been pointed at ongoing problems in the global economy and carriers’ reduced spending on CDMA technology.
No matter where the blame really belongs, the company as it has been known is over. Unless someone manages to piece the business back together, all that is left is the real-life impact of its downfall. Thousands of people have lost their jobs, elderly pensioners have seen their incomes drop and the country of Canada is saying good-bye to a major revenue generator.
There were riots over severance pay at a Nortel research center near Paris, where workers threatened to detonate gas canisters around the building. There are angry blogs focusing exclusively on Nortel’s wrong-doings and the company has faced scrutiny from the Canadian government.
For the company, these real-life consequences are largely behind it. After the conclusion of today’s auction and final approval by the U.S. Bankruptcy Court, the remaining scraps of the company will try to move forward under the direction of a new owner.
Nokia Siemens Networks (NSN) started the process with a “stalking horse” bid of $650 million for the CDMA and LTE assets.
Nortel creditor MatlinPatterson also has moved to acquire the company’s wireless assets with the goal of eventually piecing the company back together again. So far, it has bid $725 million.
Research In Motion (RIM) claimed it would have paid $1.1 billion for a cherry-picked selection of Nortel’s key assets if the company hadn’t effectively blocked it from doing so. RIM has not publicly submitted a bid.
Ericsson is the third public bidder for the company, with a rumored $730 million offer.
Aside from the wireless assets, Avaya plans to buy Nortel’s enterprise solutions business for $475 million.
As of press time, the winning bidder for the wireless assets was unknown. But by the end of the day today, Nortel plans to announce the new owner. For the company, the news could mean an opportunity for rebirth or assimilation into a larger corporate conglomerate.
Filed Under: Infrastructure, IoT • IIoT • internet of things • Industry 4.0