Ciena Wins Bid for Nortel's Optical Networking and Carrier Ethernet Businesses

Nortel (News - Alert) announced this morning that Ciena has emerged as the winning bidder in a successful auction of its Optical Networking and Carrier Ethernet businesses.

 

Regulatory approval pending, Ciena will purchase the assets for $530 million in cash and $239 in convertible notes due June 2017. As part of the deal, Nortel said at least 2,000 of its employees will receive offers of employment to transition to Ciena.

 

A joint U.S. and Canadian hearing is scheduled for Dec. 2 to approve the deal, which both companies are hoping to close in the first quarter of 2010. According to Nortel, the sale is also subject to certain regulatory approvals, information and consultation with employee representatives and/or employees in certain EMEA jurisdictions, other customary closing conditions and certain post-closing purchase price adjustments.

U.S. and Canadian antitrust clearance for the sale has already been obtained.

“Uniting our two optical businesses is a game-changing event for the optical industry, creating a leader that has the end-to-end portfolio, industry innovation leadership and significant global customer base to succeed in today’s highly competitive market,” Philippe Morin, president of Nortel’s Metro Ethernet Networks division, said in a press statement. “Ciena’s commitment to the future of our product platforms, customers and employees represents an exceptionally positive outcome to a challenging journey that started over a year ago.”

Gary Smith, president and CEO of Ciena, called Nortel’s soon-to-be-acquired Optical networking and carrier Ethernet assets some of the most “well-respected in the industry,” as evidenced by strong customer relationships.