Solectron to Buy Nortel Plants for $900 Million

Nortel Networks Corp. said it agreed to sell its plants in North America and Europe for $900 million to Solectron Corp., which will supply more than $10 billion in parts and services to Nortel under terms of the deal. Solectron, the No. 1 contract maker of electronics, plans to keep all 4,190 workers at the facilities, which test products, assemble phones and make circuit boards. Nortel will buy testing, manufacturing and repair services from Milpitas, Calif.-based Solectron. The four-year supply agreement helps Solectron do more business in the fast-growing market for communications equipment as demand for computers slows. Brampton, Canada-based Nortel, North America’s No. 2 phone equipment maker after Lucent Technologies Inc., is selling plants to focus on product development. Solectron shares jumped $4.25 to close at $43.50, and Nortel fell $2.16 to close at $117.59, both on the New York Stock Exchange.