On June 29, 2004, Nortel Networks concluded an agreement with Flextronics International Ltd. regarding the divestiture of certain Nortel manufacturing operations and related activities in Canada and Brazil. Nortel will receive estimated cash proceeds of approximately US$675-US$725 million and both companies will enter into a four-year supply agreement for manufacturing services (whereby Flextronics will manage operations expected to represent approximately US$2.5 billion of Nortel’s annual cost of sales) and a three-year supply agreement for design services. It is intended that approximately 2,500 employees will be transferred to Flextronics from Nortel.
Flextronics will acquire substantially all of Nortel’s remaining manufacturing operations, including product integration, testing and repair operations carried out in the Nortel Networks Systems Houses in Calgary and Montreal, and Campinas (Brazil), and will also acquire certain activities related to these locations, including the management of the supply chain, related suppliers and third-party logistics. For Europe, Flextronics also made an offer to purchase similar operations at the Nortel Networks Monkstown (Northern Ireland) and Chateaudun (France) Systems Houses.
Nortel was represented by a team including Robert Looney (senior counsel, global M&A), Dan McKeown (senior counsel, employment and labour - Canada), Mark Cooper (senior employment counsel - Europe), Catherine Grant (senior counsel, supply management solutions), Gale Lewis (counsel, supply management solutions), Lynn Egan (senior counsel, Nortel Networks Inc.), Randall Mishler (IP counsel, Nortel Networks Inc.), Jacques Plaines (senior counsel, Nortel Networks SA) and Tricia Arthurs (counsel, supply management); by Stikeman Elliott, with a team that included Marvin Yontef, Alison Youngman, Douglas Parker, Stewart Sutcliffe, Lisa Houston and Stee Asbjornsen (corporate /M&A), Wesley Ng (IT), Shawn Neylan, Michael Mahoney and Debbie Salzberger (competition) and Aaron Atcheson (real estate); and assisted in Europe by Stéphanie Beghe (corporate), Alexandre Courbon (environmental) and Imogen McGrath, Marc Waha and Thibaut Partsch (competition) of Cleary, Gottlieb, Steen & Hamilton; and in the UK by David Cubitt (employment) of Osborne Clarke.
Flextronics was represented by Carrie Schiff, general counsel; by Fenwick & West, with a team that included David Michaels (corporate/M&A), Stephen Gillespie (IP) and Mark Ostrau (competition); assisted in Canada by Heenan Blaikie, with a team that included Noam Goodman, Paul Wickens and Dan Awrey (corporate/M&A), Doug Gilbert and Danny Kaufer (labour and employment), Peter Clark (pensions and tax) and Subrata Bhattacharjee and Rajeev Sharma (competition); by Baker & McKenzie, with a team that included Thomas Lampert and Nina Niejahr (competition) in Brussels, Florence Blery (environmental) and Véronique Millischer (tax) in France; and in the UK by David Jamison (corporate), David Flinn (labour and employment) and Alastair Todd (environmental) of Carson McDowell.