Ciena pips NSN to Nortel Ethernet assets

Nokia Siemens Networks loses another fight for Nortel assets as Ciena ties down its Optical and Carrier Ethernet Assets for US$769m

Tags: Ciena CorporationCiena SolutionsNokia Siemens NetworksNortel Networks CorporationUSA
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Ciena pips NSN to Nortel Ethernet assets Ciena CEO Gary Smith claims that the purchase of Nortel's optical and carrier Ethernet arm will create an innovative powerhouse of complementary technologies.
By  Julian Pletts Published  November 24, 2009

In the latest episode of the cascade of Nortel Networks, Ciena Networks has been named the highest bidder for the Canadian firm's optical networking and carrier Ethernet assets.

The price tag of US$769m has seen Ciena outbid serial lowballers Nokia Siemens Networks, who lose out on yet another auction for the various business units of Nortel's business. The final winning bid cost Ciena roughly US$248m more than the first offer it tabled back at the beginning of October.

"These optical and carrier Ethernet assets bring exceptional technologies, talent and scale that will accelerate Ciena's current strategy to deliver innovative network solutions to customers worldwide," said Gary Smith, Ciena's CEO and president.

"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. We will be intently focused on integration as we work together to deliver the benefits of this transaction to customers, employees and shareholders," added Smith.

In a statement issued by the company, Ciena says that it plans to make employment offers to at least 2,000 Nortel employees to become part of its global team of network specialists. It also points out that the arm of Nortel that it is acquiring generated approximately US$1.36 billion in revenue for Nortel in 2008 and US$556 million (as yet unaudited) in the first six months of 2009.

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

"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.  With today's agreement, Nortel customers can be assured that they will be working with a known, trusted and experienced partner who can ensure continuity of supply and continue Nortel's heritage of innovation," concluded Morin.

The transaction is expected to close in the first calendar quarter of 2010.

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