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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesOn May 5, 2000, STMicroelectronics agreed to buy Nortel Networks’ semiconductor production operation in Ottawa, Canada, for a headline price of about $100 million. It was an asset purchase, not simply a factory sale: the deal also established a six-year supply and development relationship, and ST later closed the Ottawa production fab while continuing research and development there.
What did STMicroelectronics buy from Nortel?
STMicroelectronics acquired Nortel’s Ottawa semiconductor production operation and relevant technologies. The companies announced the agreement on May 5, 2000, and expected it to close in late Q2 or early Q3 of that year. Contemporary coverage described the transaction as an asset purchase with gross proceeds of approximately $100 million, subject to purchase-price adjustments and milestone-based earn-out payments. STMicroelectronics’ announcement and reporting at the time used the approximately $100 million headline figure.
A later STMicroelectronics annual-report record describes the Nortel semiconductor acquisition among 2000 investing activities at approximately $60 million. That is a different reported figure and basis from the transaction’s approximately $100 million gross headline price; the available figures do not establish a single directly comparable final cash amount. The annual-report record is the source for the approximately $60 million accounting figure.
Why did Nortel sell the operation?
Nortel was giving up ownership of semiconductor manufacturing while retaining a route to obtain components through STMicroelectronics’ wafer-fab network. Contemporary coverage presented the arrangement as a way for Nortel to reduce manufacturing cost and risk and concentrate on systems and services, while securing component supply from a manufacturer with multiple fabs. EE Times’ coverage of the transaction described that manufacturing and supply rationale.
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What else was included in the agreement?
The asset purchase was linked to a six-year strategic relationship covering supply, development and product maintenance. STMicroelectronics agreed to supply Nortel with semiconductors valued at about $2 billion during the first three years. The companies also planned to collaborate on new integrated circuits and maintain products for communications systems, including high-speed optical networks. The announcement described the agreement’s scope. Aldo Romano, then STMicroelectronics’ corporate vice president and general manager of the Telecom, Peripherals and Automotive Group, said it would cover “a variety of application fields, and the field of high speed optical networks.”
What happened to Ottawa employees?
At announcement, the companies expected approximately 470 Nortel employees to receive offers of employment from STMicroelectronics, and said they anticipated no job losses. That was the stated expectation when the deal was announced, not a later accounting of how many employees ultimately transferred. Contemporary reporting covered the expected offers.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What happened to the Ottawa fab after the acquisition?
In May 2001, STMicroelectronics announced it would close the Ottawa production wafer fab and transfer production to other ST plants worldwide by December. The company said it would continue its Ottawa R&D operation. The later move therefore ended production at the Ottawa fab, but did not mean that all ST activity in Ottawa ended. EE Times’ 2001 report covered the closure and production transfer.
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