Ciena wins Nortel's Ethernet, ON assets

Dylan Bushell-Embling
24 Nov 2009

Ciena has won Nortel’s carrier Ethernet and optical networking businesses with a $769 million bid.

Ciena offered $530 million in cash and $239 million in convertible notes for all of the product platforms, patents and IP rights held by the businesses, as well as all of Nortel's ON and carrier Ethernet contracts.

As part of the deal, at least 2,000 Nortel employees - around 85% of the business units' staff - will be offered positions at Ciena.

Some analysts have baulked at the purchase price, which is nearly a third over Ciena's $521 million stalking horse bid.

The acquisition looks likely to add heft to Ciena, whose revenue is less than half that of the Nortel divisions.

Ciena CEO Gary Smith pointed to Nortel’s strong customer relationships, said the expanded firm’s “collective customer base will be able to rely on one of the largest and most innovative companies strategically focused on converged Ethernet networking.”

The sale still requires court approval from US, Canada and some EMEA jurisdictions, but antitrust regulators from the US and Canada have already signed off on the potential deal.

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