Nortel buys Sonoma for $540 million

Networkers gets one step closer to Cisco

Broken CD with wrench

Nortel Networks has agreed to pay $540 million (£360 million) in stock for broadband service provider Sonoma Systems. Sonoma is a privately held company and will help Nortel mix and blend its current Internet service in preparation for the big broadband take-off, claimed to be worth $18 billion by 2002.

Nortel sits behind Cisco at the moment in the networker stakes but this deal is a definite move in the right direction, making the company more of a complete solution provider. It also comes hot on the heels of its acquisition of switch giant Alteon WebSystems a fortnight ago for $7.8 billion. Both Cisco and Lucent were also after Alteon.

In fact, its acquisition crazy among the network boys at the moment. In just the last week we've seen Spring Tide go to Lucent for $1.3 billion and NuSpeed go to Cisco for $450 million. This most recent buy just adds to the battle between the top three to cover all their bases before the big big money starts pumping in. ®

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