Ciena to Buy Nortel Optical, Ethernet Business
After a three-day auction, Ciena Corp. has outbid Nokia Siemens Networks (NSN) to acquire the optical networking and Ethernet equipment divisions of bankrupt Nortel Networks for $769 million.
Ciena agreed to pay $530 million in cash and $239 million in convertible notes due in 2017 for the assets.
The deal boosts Ciena to third place in the optical network equipment market, which will help it compete against larger rivals Alcatel-Lucent Huawei Technologies Co. However, when the news broke on Reuters, Ciena’s shares took a substantial hit. Investors are concerned that the deal will weigh down its operations, and analysts expressed worry about how the U.S. network equipment maker will integrate the new assets, which will double Ciena’s size.
Reuters has more.