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NORTEL SNAPS UP BROADBAND FOR $416M BEFORE IPO

Toronto, Canada-based telecoms equipment supplier Northern Telecom Ltd has acquired Winnipeg, Canada-based high-speed wireless equipment manufacturer Broadband Networks Inc for $416m, snapping it up just before an initial public offering on the Toronto Stock Exchange. Broadband – not to be confused with the US company of the same name, recently acquired by Numerix Corp – manufactures the Reunion line of digital microwave radio equipment products for wireless, data and television transmission, using broadband fixed wireless systems such as the local and multi-channel, multi-point distribution services, LMDS and MMDS, and wireless cable. Nortel, already an OEM customer of Broadband, decided to acquire the company so it can go to the soon-to be deregulated communications carrier marketplace with a full bundle of core radio and networking equipment. The company will become the broadband wireless arm of Nortel’s Wireless division and will keep its staff and the current management. The Reunion family, already field tested by Nortel, spans all the radio frequencies between 2.5GHz and 40GHz which are the range of frequencies allocated to broadband wireless by worldwide regulators. In the US, some of these frequencies are already used for analog services, by wireless cable operators. But digital networks, with their attendant potential for high speed two-way data and voice transfer, have not been installed yet. Nortel’s $416m offer for Broadband is one third in cash, at $4.31 per BNI share, and the remainder an extra exchange of 0.0856 Nortel shares per BNI share. Nortel’s current share value is $91.93. Nortel has already agreed to acquire the management shareholding of just over 80%, 24 million of the company’s common shares, and has a deadline of January 5 to acquire the remaining 5.5 million shares, curently held by Newbridge Networks Inc (15%) and Siemens AG (5%).

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CBR Staff Writer

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