Ciena agrees $521 million offer with Nortel

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Ciena has entered into an agreement with Nortel for its latest asset up for sale.

The networking company has offered bankrupt Nortel $390 million (£244 million) in cash with a further 10 million shares of Ciena common stock for its optical networking and carrier ethernet businesses, bringing the value of the offer to $521 million.

“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,” said Gary Smith, Ciena’s chief executive and president, in a statement.

“We believe we are best positioned to leverage these assets, thereby creating a significant challenger to traditional network vendors.”

The company has also confirmed it would make offers to a minimum of 2,000 of Nortel’s staff to keep them on and become part of Ciena’s global workforce.

Although this is a firm offer from Ciena, which initially expressed interest in the assets earlier this week, the assets still need to go through a competitive bidding process before a deal is agreed. It also needs to gain approval from both the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice.

An auction is expected to happen in the next few months.

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