Ciena wins bidding for Nortel divisions

Battle for optical and carrier Ethernet products.

US network equipment manufacturer Ciena has won the right to buy Nortel's optical networking and carrier Ethernet businesses.

Ciena's US$769m ($832m) offer trumped a bid from main rival Nokia Siemens Networks (NSN).

A minimum of 2,000 employees, around 85 percent of the original workforce, will be offered the opportunity to work at Ciena, the firm said.

The deal will more than double Ciena's turnover, but some commentators have suggested that it could hurt the company's shares by weighing down its operations.

NSN, in conjunction with private equity firm One Equity Partners, was the main rival to Ciena in the auction, but has confirmed that it did not submit the highest bid.

"The final offer submitted represented fair value for the assets, and further bidding could not be financially justified," NSN said in a statement.

Philippe Morin, president of metro Ethernet networks at Nortel, claimed that uniting Nortel's and Ciena's optical networking businesses would be a "game changing event for the optical industry".

"Ciena's commitment to the future of our product platforms, customers and employees represents a positive outcome to a challenging journey that started over a year ago," he added.

The deal represents the latest chapter in the wholesale selling off of Nortel's assets after the company filed for bankruptcy protection in January.

Nortel has already agreed to sell its CDMA and LTE wireless technology businesses to Ericsson, and it was announced last week that Avaya's proposed acquisition of Nortel's Enterprise Solutions business had been sanctioned by the European Union, allowing the possibility of a US$900m deal to go ahead.

The Ciena deal is subject to court approval in the US, Canada, France and Israel, which Nortel will seek at a joint hearing on 2 December.