Nortel Networks is to sell its optical components business unit. It is understood that the business unit maybe sold for as little as $50 million. Nortel turned down a $100 billion all stock offer from Corning for the unit in 2000. The unit has fallen in value because of its high cash burn rate (around $15-20 million per quarter) and overcapacity in the optical component industry.
Nortel have opted to sell the business unit rather than downsize or shut it down completely because 70% of the optical components made by the unit are sold to Nortel. Market analysts say Nortel has already received bids from Intel, JDS Uniphase, Agilent Technologies, Bookham Technology and Sumitomo Electric for the optical component unit.