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Nortel to buy Qtera for $3.25 billion

Today's breaking news
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Nortel Networks has paid $3.25 billion in Nortel stock to buy Qtera, a privately held maker of long-reach optical networking systems.

A portion of the stock price is contingent upon Qtera reaching certain business objectives, Nortel says, although the company did not outline the criteria in the statement.

The purchase is designed to give Nortel cutting-edge optical technology that produces improved Internet performance and economics, Nortel says. Qtera's technology enables optical signals to be sent up to 4000 kilometers, or 2500 miles, in optical form at speeds up to 10G bit/sec, Nortel says. By transmitting data as light, Qtera's technology eliminates up to 75% of the optical-electrical-optical conversions.

After the acquisition is completed - expected to be in the first quarter of 2000 - Qtera will become a subsidiary of Nortel and Qtera's President and CEO Fahri Diner will lead the business.

The deal is subject to approval of Qtera shareholders and is not expected to affect Nortel's earnings until 2001, at which time it will raise Nortel's profit after acquisition costs. The number of Nortel shares to be given to Qtera shareholders will be based on the average price of Nortel stock during a specified period prior to closing, but will not exceed 48 million and not be less than 30 million shares, according to the statement.

Qtera, based in Boca Raton, Fla. can be found at http://www.qtera.com/.

Nortel Networks, in Brampton, Ontario, is at 905-863-0000 or at http://www.nortel.com

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