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The Deal That Could Have Saved Nortel

The Deal That Could Have Saved Nortel
The Deal That Could Have Saved Nortel 

By Andy Greenberg

As Nortel files for bankruptcy Wednesday, analysts point to sinking 
sales, missed earnings and poor management as drivers for the Canadian 
telecom's long descent to insolvency.

But a less-discussed factor may have scuttled the struggling networking 
company's last hope for a savior: concerns over Chinese cyberspying.

Toronto-based Nortel, whose stock has lost more than 97% of its value in 
the last year, announced in September that it would sell its metro 
Ethernet business, an Internet-focused piece of the company that 
generates about $1.5 billion a year in revenue.

The most interested potential acquirer of the Ethernet division may have 
been Chinese company Huawei, which, according to Avian Securities, bid 
$400 million for Nortel's offering in September. This was a generous 
offer considering the company's current market capitalization, hammered 
by debt and missed earnings projections, languishes at less than half 
that value.


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