View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
November 22, 2009

Ciena to buy Nortel’s ethernet assets for $769m

Includes all product platforms, patents and intellectual property used in businesses

By CBR Staff Writer

Ciena has agreed to acquire optical networking and carrier ethernet assets of Nortel’s Metro Ethernet Networks (MEN) business for $769m in cash and notes. It includes $530m in cash and issue of $239m in aggregate principal amount of 6% senior convertible notes due 2017. The transaction is expected to close in the first calendar quarter of 2010.

Gary Smith, CEO and president of Ciena, said: “With this combination, we are bringing together complementary technologies in switching and transport to create an innovative powerhouse with the scale to challenge the industry status quo and offer customers a practical path for transitioning to automated, optical Ethernet-based networking.”

In an auction, Ciena has emerged as the successful bidder for the acquisition of substantially all of the optical networking and carrier ethernet assets of Nortel’s Metro Ethernet Networks (MEN) business.

The purchase will include all product platforms, patents and intellectual property that are predominantly used in the businesses, and provides for the transition of substantially all of Nortel’s Optical Networking and Carrier Ethernet customer contracts to Ciena, the company said.

Ciena noted that the assets to be acquired generated approximately $1.36 billion in revenue for Nortel in 2008 and $556m in the first six months of 2009. It expects the transaction to be accretive to its results of operations in fiscal 2011. It is also expected to make employment offers to at least 2,000 Nortel employees to become part of Ciena’s global team of network specialists.

Ciena has been granted early termination of the antitrust waiting period under the Hart-Scott-Rodino Act and also has received notification from the Canadian Competition Bureau terminating the applicable waiting period for the proposed transaction under the competition act.

Philippe Morin, president of metro ethernet networks for Nortel, said: “Ciena provides a natural fit for Nortel’s optical and carrier ethernet assets, providing an environment where our businesses’ expertise and technology can be grown and leveraged. The combination of our two organisations creates an industry powerhouse with a heritage of innovation and a shared commitment to building and maintaining reliable networks.”

Content from our partners
Green for go: Transforming trade in the UK
Manufacturers are switching to personalised customer experience amid fierce competition
How many ends in end-to-end service orchestration?

However, the sale is subject to court approvals in the US and Canada, which Nortel will seek at a joint hearing on December 2, 2009, and in France and Israel. The sale is also subject to certain regulatory approvals, other customary closing conditions and certain post-closing purchase price adjustments.

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.