Proposed Flextronics, Nortel Relationship Could Add $2 Billion in Revenue
Electronics manufacturing services provider (EMS) Flextronics (Singapore) is in discussions with Nortel Networks relating to a proposed relationship, whereby Nortel Networks would divest nearly all of its remaining optical, wireless and enterprise manufacturing operations and related supply chain activities to Flextronics.
If discussions are successful, Nortel Networks' Systems Houses activities in Montreal and Calgary, Canada; Campinas, Brazil; Monkstown, Northern Ireland; and Chateaudun, France would be transferred to Flextronics.
Flextronics expects to consolidate and provide full-service supply chain offerings including printed circuit board assembly and fabrication, along with logistics and repair services supported from industrial parks on at least four different continents.
The successful completion of these arrangements would result in Flextronics undertaking and managing in excess of $2 billion of Nortel Networks annual cost of sales. Flextronics anticipates that it would pay Nortel Networks in excess of $500 million in cash over a nine-month period for certain assets.
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