The agreements relate to a number of transactions including the transfer to EADS Defence and Security Networks (EDSN) of Cogent* Defence Systems, a UK leader in defence and security telecommunications systems and currently a division of a Nortel Networks UK subsidiary, and the current German-based communication networks division of EADS, VEKN, which specialises in defence tactical networks. Both of these transfers to EDSN are subject to usual regulatory approvals and other pre-conditions, satisfaction of which are currently underway and expected to be completed within the next 60 days.

The agreements also relate to the transfer to EDSN of the M6500 PBX business from Matra Nortel Communications, a Nortel Networks subsidiary in which EADS is a shareholder. EDSN will assume responsibility for the M6500 product and technology, including its path to Internet Protocol (IP) telephony. This is a core technology at the heart of EDSN security solutions.

These agreements are part of EADS plans to strengthen its telecommunications organisation, created in March 2001 within the EADS Defence and Civil Systems Division, which focuses on defence and security markets. EADS aims to turn EDSN, an EADS subsidiary in which Nortel Networks is a shareholder, into a global leader in telecommunications for defence and security systems based on civilian technologies.

Nortel Networks has recognized that a more specialised approach to the defence market will benefit its customers in this area. Nortel Networks will continue to develop Voice over IP solutions for enterprises through Nortel Networks Meridian* portfolio, with approximately 43 million units deployed worldwide. Nortel Networks is focusing on Voice over IP as one of five core markets identified in a Work Plan implemented earlier this year. This Work Plan aligns Nortel Networks against changing market dynamics by streamlining costs and sharpening the company’s business focus.

According to Thomas Enders, member of the Executive Committee, EADS, and manager of the Defence and Civilian Systems Branch, The closing of these transactions will provide EDSN with the means to fulfill its ambitions, by providing it with a technological advance in the field of IP solutions, securing access to key technologies, while controlling the development path of its own product lines, and strengthening its position in major European markets, primarily Germany and the UK.

SOURCE: COMPANY PRESS RELEASE