STMicroelectronics Buys Nortel Chip Plant

SAN FRANCISCO (05/05/2000) - STMicroelectronics NV today said it is buying Nortel Networks Corp.'s silicon semiconductor manufacturing plant in Ottawa, Ontario, for US$100 million. The duo have also agreed to a six-year plan whereby STMicroelectronics will supply Nortel with semiconductor devices, the companies said in a statement issued today.

The purchase agreement, expected to be completed in the next four months, is valued at a maximum of $2 billion during the first three years, the statement said.

Nortel and STMicroelectronics will also work together to develop new silicon semiconductor technologies and products, the statement said.

No layoffs are expected to result from the agreement. About 470 Nortel employees will be offered jobs by STMicroelectronics.

STMicroelectronics can be reached in St. Genis-Pouilly, France, at +33-4-5040-2532, or on the World Wide Web at http://www.st.com/. Nortel, in Brampton, Ontario, can be reached at +1-905-238-7000, or via the Web at http://www.nortelnetworks.com/.

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