Ciena winning bidder for Nortel businesses
Ciena Corp. is the winning bidder for Nortel Networks' optical networking and carrier ethernet businesses.
Ciena's bid was worth $769 million US, about $248 million more than it initially bid in October.
The Maryland-based company emerged on top after a three-day auction in New York that began Friday. It beat out much larger telecom equipment maker Nokia Siemens.
Gary Smith, Ciena's president and chief executive officer, said the acquisition of Ottawa-based Nortel would accelerate the company's growth strategy.
Nokia Siemens outbid
"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," Smith added in a statement.
Ciena will pay $530 million US in cash plus $239 million US principal amount of convertible notes due June 2017 to acquire the Nortel unit.
Nortel said it was pleased with the deal, particularly with Ciena's commitment to retaining most of its employees.
"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," said Philippe Morin, president of Nortel's Metro Ethernet Networks.
"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," Morin said.
The sale is subject to court approvals on either side of the border, which Nortel will seek at a joint hearing Dec. 2.
Nortel said it hopes to close the sale in the first quarter of 2010.
Rival bidder Nokia Siemens put out a statement Monday confirming it did not submit the highest bid. It said further bidding "could not be financially justified."
Ciena announced Monday morning that a minimum of 2,000 Nortel employees will receive offers of employment.
That represents more than 85 per cent of the employees at Nortel's global optical networking and carrier ethernet businesses.