Siemens Enterprise won

Either Reuters misquoted Siemens Enterprise’s CEO, or the Europeanjoint venture is backing away from comments made about its interest –or lack thereof – in acquiring Nortel assets.

An articleattributed to the Reuters news wire service, published in Tuesday’sNational Post, stated SiemensEnterprise Communications GmbH & Co. is “looking intobuying parts” of Brampton, Ont.-based Nortel.

Munich-basedSiemens Enterprise Communications is a joint venture between The GoresGroup, a private equity firm, and German electronics giant Siemens AG.It includes technology from both Siemens and Enterasys Networks.

Thearticle quoted James O’Neill, chief executive officer of SiemensEnterprise, as stating: “The enterprise client unit is interesting. Weare looking into that.”

But when Network World Canada asked aSiemens Enterprise spokeswoman, Silvie Cassanova, to confirm the quote,she would not confirm Siemens is “looking into” buying part of Nortel.

“WhatMr. O’Neill told Reuters was Nortel is a competitor of ours and wealways keep an eye out on our competitors, but that’s the extent ofwhat he told Reuters,” Cassanova said.

Asked to confirm Siemens Enterprise Communications is involved in discussions, she said she could not comment.

“I’m sure you can understand we have a policy of not commenting on rumours or speculation in the market.”

Thisis not the first time reports have surfaced that Siemens EnterpriseCommunications may be interested in parts of Nortel, though Nortelcategorically denied a recent Wall Street Journal report.

Thepress has been active with speculation ever since Nortel enteredbankruptcy protection Jan. 14. Israeli networking firm Radware hasbought Nortel’s application acceleration unit, but what will happen tothe remaining units of Nortel are a matter of speculation.

Sellingthe enterprise switching business would be a bitter pill to swallow,given that Nortel paid US$9 billion for Bay Networks in 1998, butNortel’s traditional business was on the voice side.

It seems tobe accepted wisdom that Nortel is going to essentially break off intolittle pieces, with someone taking the enterprise unit, someone elsetaking the carrier networking assets, and other units shutting down orbeing sold, until the company ceases to exist. But this is not Nortel’schoice to make. The company is operating under court supervision, andowes money to a multitude of creditors, including bondholders andpensioners, all of whom have some say in what happens next.

Acourthearing in Toronto last month showed just how difficult it isfor Nortel to make what should normally be routine decisions, such astransferring cash from one subsidiary to another.

The lawyersinvolved include those representing Nortel, its board of directors, itscourt-appointed monitor (Ernst & Young), a committee ofunsecured creditors, a committee representing recently-laid-offemployees, Export Development Canada, the Pension Benefits GuaranteeFund and carriers such as Bell and Verizon.

Unless Nortel standsto get substantial amounts of cash from selling off assets, don’t lookfor any major acquisitions to be approved any time soon. You can takethat advice with a grain of salt, given that I predicted, late lastyear, that Nortel would not go bankrupt.

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Jim Love, Chief Content Officer, IT World Canada

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