Nortel Networks Corp. and Corning Inc. have ended talks that would have combined their fiber optic operations. If a merger had been completed, it would have given Corning, the world’s largest manufacturer of optical fiber, a relatively full line of the lasers and other components used in making state-of-the-art communications and data networks.

Corning had been negotiating to do so by acquiring Nortel Networks’ fiber optics unit, which would have vaulted Corning into a strong No. 2 position behind JDS Uniphase as a supplier of such goods, The New York Times reports today.

The deal would also have helped Nortel Networks, the largest manufacturer of optical communications networks, pursue its policy of outsourcing most component manufacturing to concentrate on system design.

For all the strategic sense the deal made though, the numbers just did not add up. Nortel said Monday that its fiber optic components unit, which sells most of its parts to the company’s own businesses, have a sales value of US$2.5 billion.

After recent agreement by JDS Uniphase to acquire SDL, another optical component company, for US$41 billion, the market value of the Nortel component operations soared to more than US$100 billion, which is more than the total stock market value of Corning .

There was no way to put the businesses together without Nortel ending up controlling a majority of Corning’s stock — at least 57% by some estimates.

Nortel could have accepted non-voting stock shares or a variety of other governance restrictions that would have given Corning room to operate independently, but no acceptable approaches emerged in the talks.

In any event, analysts said, it is unlikely that the two companies could have convinced Wall Street or others in the industry that Nortel would not have been in control. That raised the specter of other major equipment purchasers, like Lucent Technologies, Nortel’s biggest rival, cutting back on their business with Corning to avoid helping Nortel.

On Thurdsay, in a written statement saying that Corning remained committed to expanding its optical offerings, Roger G. Ackerman, Corning’s chairman and chief executive, pointedly concluded that “our core value of independence” was “central to this strategy.”

Corning’s independence was not the only hurdle. The price of acquiring Nortel’s components business would have led to near-term declines in Corning earnings.