Ciena trumps Nokia Siemens to win Nortel

NEW YORK, USA: Ciena Corporation (Ciena), the fiber-optic gear maker for telecom companies, won the auction for Nortel Networks Corporation's optical-networking assets, beating Nokia Siemens.

Ciena won Nortel's principal operating subsidiary Nortel Networks Limited (NNL), and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Limited (in administration), at a purchase price of $530 million in cash plus $239 million principal amount of convertible notes due June 2017. Earlier, Nokia Siemens had bid $770 million in cash with One Equity Partners LLC. 

A minimum of 2,000 Nortel employees will receive offers of employment from Ciena, which currently represents more than 85 percent of the global optical networking and carrier Ethernet employee base. This includes those employees assigned to the optical networking and carrier Ethernet businesses in certain EMEA jurisdictions who will transfer automatically to Ciena by operation of law.

Philippe Morin, president, Metro Ethernet Networks, Nortel, said: "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.:

Gary Smith, president and CEO, Ciena, said: "Nortel's optical and carrier Ethernet assets are well-respected in the industry, as evidenced by strong customer relationships across the globe. By combining these assets with Ciena's existing resources, our 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 is subject to court approvals in the U.S. and Canada, which Nortel will seek at a joint hearing on December 2, 2009, and in France and Israel.