Nortel and Corning call off merger talks

Networking giant Nortel Networks has scrapped talks with fibre optic cable maker Corning over creating a combined fibre optic components businesses.

The companies said in a statement last night that both parties had mutually agreed not to continue preliminary discussions on the deal, said to be worth $100bn (£67bn).

The deal was expected to have involved a sale of Nortel's optical components business to Corning, paid for by stock. According to reports, Nortel could have ended up owning more than half of Corning.

Roger Ackerman, Corning chief executive, said the company would continue to have a close working relationship with Nortel and while it plans to continue looking for growth opportunities, it is important that it remains independent.

John Roth, Nortel's president and chief executive, said: "The discussions we have had with Corning reflect the strong business relationship we have shared for many years. Corning remains one of our strategic allies."

Nortel will continue to invest in and strengthen its optical components business to provide the strategic support for Corning's optical internet business, added Roth. Earlier this week, Nortel announced that it plans to invest nearly $2bn into its optical fibre arm.