Nortel to Sell Optical Networking and Carrier Ethernet Businesses
Posted October 8, 2009on:
- Enters into sale agreements for Optical Networking and Carrier Ethernet Businesses with Ciena for US$390 million in cash and 10 million shares of Ciena common stock
- Agreements include the planned sale of substantially all assets within the Optical Networking and Carrier Ethernet businesses globally
- Sale of businesses is best path forward for the future of Nortel’s Optical Networking and Carrier Ethernet customers and employees
Today is a significant day for Nortel Metro Ethernet Networks. Nortel announced that it has entered into a “stalking horse” asset sale agreement with Ciena for its North American, Caribbean and Latin America (CALA) and Asian Optical Networking and Carrier Ethernet businesses, and an asset sale agreement with Ciena for the Europe, Middle East and Africa (EMEA) portion of its Optical Networking and Carrier Ethernet businesses for a purchase price US$390 million in cash and 10 million shares of Ciena common stock.
You can find the news release on Nortel.com by clicking here.
These agreements include the planned sale of substantially all the assets of the Optical Networking and Carrier Ethernet businesses globally. If successfully completed, this transaction with Ciena:
- Provides for the transition of substantially all of Nortel’s Optical and Carrier Ethernet customer contracts.
- Includes substantially all of Nortel’s Optical and Carrier Ethernet product portfolio and related services business, including the OME 6500, OM 5000, CPL, and all other optical/Carrier Ethernet platforms, as well as our industry-leading 40G/100G technology.
- Includes all patents and IP that are predominantly used in the Optical and Carrier Ethernet businesses.
This transaction will not include the Nortel Multiservice Switch (MSS and formerly called Passport) business. There are no changes to Nortel’s plans to develop the MSS platform and actively support our broad base of MSS customers globally. The MSS business remains a strong, profitable contributor to Nortel’s overall business.
We believe that today’s announcement provides a step towards clarity for our customers, and is the best path for Nortel to preserve the optical innovation and customer relationships that we’ve built as a leader in the optical industry over the last two decades.
This transaction is subject to a court-approved “Stalking Horse” process (or 363 Sale) that allows other qualified bidders to submit higher or otherwise better offers. We will endeavor to complete this transaction as expeditiously as possible. If Ciena emerges as the successful bidder, under the terms of Ciena’s “stalking horse” bid, we would target being in a position to close the sale in Q1 2010 provided all court, regulatory and other closing conditions have been met.
Source: Nortel’s Analyst Communication