Bay in Nortel takeover talks?
Could be that consolidation thang
A Year Ago From The Register 6 May 1998 We thought you might be interested in the following item published by a UK reseller in an email newsletter at the weekend. "In the race to acquire data networking expertise, telecommunications equipment makers Northern Telecom and Lucent Technologies appear to be in hot pursuit of Bay Networks. Sources close to Bay and other industry observers believe the company is on the verge of being acquired by - or at the very least, entering into a partnership with - one of the two telecommunications vendors. According to a source inside Bay, CEO David House met with Nortel officials in recent weeks and received a buyout offer from Nortel "that was not to House's liking." A Bay spokesman declined to comment on whether the company is negotiating to be acquired." Is this true? We have to concede our ignorance on this score. But a Bay buyout would make sense. As far as The Register is concerned, only Cisco and 3Com have secured their place on the networking equipment vendor top table. Below these two, the market looks awfully fragmented. All the other networking vendors are up for grabs - and that includes Bay Networks , Cabletron, Newbridge Networks, Ascend, Shiva, Madge, Fore. The grabbers will be - already are - telecoms equipment manufacturers Lucent and Nortel. Siemens looks like another contender. And making up the quartet is Compaq. It stated aim to become the world’s third biggest networking vendor is ludicrous…if the company intends to do this organically. If nothing else, Compaq’s ambitions could be the reason why the market rumours about a bid approach to Cabletron are becoming increasingly insistent. But it is difficult to see this one as a goer - for the time being. After all, Compaq still has an awfully big Digital Equipment meal to digest. And an awful lot of warehouses to empty. ®
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