Private equity firms are considering combining Motorola’s handset unit with some of Nortel’s assets, according to a report from mergermarket posted on the Financial Times’ website. Advent International is reportedly considering acquiring Motorola’s handset business and merging it with some of Nortel’s assets to form a new group. Advent is apparently also looking for other investors to join a consortium of potential buyers. Speculation suggests private equity firm CVC turned down the opportunity to be involved. This is not the first time a Motorola/Nortel merger has been rumoured; an infrastructure partnership was reported to have been considered by both firms last year.

Both Motorola and Nortel are struggling at present but claim they are preparing to turn themselves around. Despite its handset unit reporting a fourth-quarter operating loss of US$595 million after sales declined 51 percent, Motorola co-CEO Greg Brown insisted earlier this month that Motorola has established a path back to profitability for the unit and rejected the case for shutting the unit or combining it with a rival. Meanwhile, Nortel CEO Mike Zafirovski has said that the company hopes to complete its reorganisation plans and emerge from bankruptcy protection before mid-year. Reports last week, however, said the Canadian equipment vendor is already in talks to sell-off its two main business units to rivals as an alternative to emerging from bankruptcy protection. Nokia Siemens Networks has been linked to its mobile assets, whilst Avaya and Siemens are reportedly among several companies looking at Nortel’s enterprise business.