Nortel to Sell Optical Networking and Carrier Ethernet Businesses

­Nortel Networks has continued its dismemberment with the announcement of a stalking horse" asset sale agreement with Ciena for its Networking and Carrier Ethernet businesses. The offer, which can be trumped by another bidder is for US$390 million in cash and shares in Ciena currently worth around US$131 million.

The agreement includes the planned sale of substantially all assets of the Optical Networking and Carrier Ethernet businesses globally, including Nortel's OME 6500, OM 5000 and CPL platforms, its industry-leading 40G/100G technology, and the related services business. The agreements also include all patents and intellectual property that are predominantly used in the businesses, and provide for the transition of substantially all of Nortel's Optical Networking and Carrier Ethernet customer contracts.

The sale also agrees that at least 2,000 employees (more than 85 percent of the global Optical Networking and Carrier Ethernet employee base) would be offered employment with Ciena. This includes employees assigned to the Optical Networking and Carrier Ethernet businesses in certain EMEA jurisdictions who would transfer to Ciena by operation of law.

"Today's announcement is a positive step forward for the future of Nortel's Optical Networking and Carrier Ethernet customers and employees," said Philippe Morin, president, Metro Ethernet Networks, Nortel. "The sale of these businesses to a strong and stable buyer enables the innovation of one of the foremost leaders in the optical industry to continue to thrive."

"Employees have done a tremendous job stabilizing our business under challenging conditions while continuing to deliver on product and service commitments. We are particularly pleased that the agreements would offer a significant number of the employees in the Optical Networking and Carrier Ethernet teams an opportunity to continue their world-class innovation," said Morin.

Nortel's Optical Networking business is the leader in next-generation 40G/100G optical technology and one of the largest providers of optical networking equipment in the world, having deployed 430,000 optical nodes to over 1,000 customers in more than 65 countries worldwide. Nortel has secured 52 wins to date for its 40G optical solution and has announced eight successful field trials for its 100G equipment planned for availability later this year.

Posted to the site on 7th October 2009