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September 11, 2001
Nortel Networks, EADS to Redefine Telecommunications Alliance
PARIS – European Aeronautic Defence and Space Company (EADS) and Nortel Networks* [NYSE/TSE: NT] have entered into a series of agreements to realign their telecommunications operations and business focus in key markets.
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.” “Nortel Networks strategic goal is to support our service provider and enterprise customers, enabling them to capitalise on the high-performance Internet through our industry leading Wireless Internet, Metro Optical, Optical Long Haul, Intelligent Internet and Voice over IP platforms,” said Pascal Debon, president, Nortel Networks EMEA (Europe, Middle East, Africa.) “France remains a vital market for Nortel Networks, where we will continue to focus and drive our business forward.” EADS N.V (European Aeronautic Defence and Space Company) is the leading European group and worldwide number three in the fields of aeronautics, space, and defence. It covers the fields of its founding partners, Aerospatiale Matra (France), Construcciones Aeronauticas SA (Spain), and DaimlerChrysler Aerospace AG (Germany). The EADS group went public in Paris, Frankfurt, and on the Spanish markets on the day it was created (10 July, 2000). Visit the EADS web site at www.EADS.net. Nortel Networks is a global leader in networking and communications solutions and infrastructure for service providers and corporations. The Company is at the forefront of transforming how the world communicates, exchanges information and profits from the high-performance Internet through capabilities spanning the Optical Internet, Wireless Internet, Intelligent Internet and IP (Internet Protocol) technologies and services. Nortel Networks does business in more than 150 countries and can be found on the Web at www.nortelnetworks.com. Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the severity and duration of the industry adjustment; the sufficiency of our restructuring activities, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; fluctuations in operating results and general industry, economic and market conditions and growth rates; the ability to recruit and retain qualified employees including at the most senior management levels; fluctuations in cash flow, the level of outstanding debt and debt ratings; the ability to make acquisitions and/or integrate the operations and technologies of acquired businesses in an effective manner; the impact of rapid technological and market change; the impact of price and product competition; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization in the telecommunications industry; the dependence on new product development; the uncertainties of the Internet; the impact of the credit risks of our customers and the impact of increased provision of customer financing and commitments; stock market volatility; the entrance into an increased number of supply, turnkey, and outsourcing contracts which contain delivery, installation, and performance provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; the ability to obtain timely, adequate and reasonably priced component parts from suppliers and internal manufacturing capacity; the future success of our strategic alliances; and the adverse resolution of litigation. For additional information with respect to certain of these and other factors, see the reports filed by Nortel Networks Corporation and Nortel Networks Limited with the United States Securities and Exchange Commission. Unless otherwise required by applicable securities laws, Nortel Networks Corporation and Nortel Networks Limited disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. *Nortel Networks, the Nortel Networks logo, the Globemark Cogent and Meridian are trademarks of Nortel Networks.Contact for Press and Analysts:
Michel Syka
Nortel Networks
33 1 34 60 76 54
sykam@nortel.com
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