Ciena bids $521M for Nortel business units

Oct 07, 2009

(AP) -- Ciena Corp. is offering cash and stock worth $521 million to acquire some of Nortel's most-prized remaining business units as the fallen telecommunications company continues to liquidate.

The deal announced Wednesday covers the Nortel Optical Networking and Carrier Ethernet businesses, which have been considered among the best assets yet to be sold by Nortel.

Nortel said its agreement with Ciena calls for the Linthicum, Md.-based company to offer jobs to at least 2,000 employees, or more than 85 percent of total at Nortel's Optical Networking and Carrier Ethernet business units.

However, there's no guarantee the deal will close as announced since Ciena's offer will be used as an opening bid for an auction by Nortel.

In previous auction of Nortel business units this year, the final prices have been substantially higher than the initial "stalking horse" bids.

In this case, Ciena is offering $390 million in cash and 10 million shares of Ciena common stock. The shares are currently worth about $131 million.

Nortel, a former giant that at one point accounted for one-third of the market value on the entire , filed for in Canada and the U.S. in January.

The Toronto-based company has been selling its operations piece by piece.

Last month, Nortel announced its Enterprise Solutions division would be sold to New Jersey-based Avaya for $900 million. Avaya had originally bid $475 million in July but sweetened the offer to win an auction that began Sept. 11 and lasted several days.

Prior to that, LM Ericsson of Sweden agreed to pay $1.13 billion for Nortel's wireless network business, beating a $650 million stalking horse bid put forward by Siemens, a joint venture between Finland's Corp. and Germany's AG.

Philippe Morin, president of Nortel Metro Ethernet Networks, said that Nortel's employees have done a "tremendous job stabilizing our business" and the company is "particularly pleased" that a significant number of them will be offered jobs with Ciena. The addition of 2,000 employees from Nortel would roughly double the size of Ciena's global workforce.

"This is a unique and exciting opportunity for us to accelerate our existing strategy and the pace of our growth plans by two to three years," Gary Smith, Ciena's CEO and president, said in a statement.

Ciena shares rose 48 cents, or 3.7 percent, to $13.53 in morning trading Wednesday in New York.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: GoDaddy revs up tech sector with Wall Street offering (Update)

Related Stories

Nortel to sell itself off in pieces

Jun 20, 2009

(AP) -- Nortel Networks, once a technology giant, has decided to sell itself off in pieces rather than attempt to emerge from bankruptcy as a restructured company.

Nortel strikes deal to sell business unit to Avaya

Jul 20, 2009

Canadian telecom equipment maker Nortel said Monday it reached a deal to sell its enterprise solutions business to US-based Avaya for 475 million dollars pending approval of a bankruptcy court.

London 2012 replaces sponsor Nortel with Cisco

Jul 10, 2009

(AP) -- London Olympic officials on Friday replaced bankrupt Canadian technology sponsor Nortel Networks with Cisco for the 2012 Games, a move that will cost organizers $19.4 million in revenue.

Courts OK $1.13B sale of Nortel assets to Ericsson

Jul 28, 2009

(AP) -- U.S. and Canadian courts have approved Swedish wireless company LM Ericsson's $1.13 billion bid to buy next-generation wireless technology and other assets from insolvent telecom equipment maker Nortel Networks Corp.

Recommended for you

FTC's Google investigation probed by Senate antitrust chief

12 hours ago

The chairman of a U.S. Senate antitrust panel will look into the release of a confidential Federal Trade Commission report on an investigation of Google Inc.'s search business, which was closed in 2013 without an enforcement ...

Traffic court goes digital: Startup fosters settlements

12 hours ago

Traffic court is going digital. Michigan startup Court Innovations has developed a software solution that allows drivers to settle traffic violations by negotiating in a virtual environment instead of showing up to court ...

Amazon puts home staples on refill button

13 hours ago

Amazon moved Tuesday to become an errand service for home staples, introducing a "dash button" to allow consumers to instantly order popular products for home and kitchen.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.