Ciena Corporation to acquire assets of Nortel Networks Corporation's Metro Ethernet Networks business

Update on November 23, 2009:

Ciena Corporation has been selected as the successful bidder to acquire substantially all of the optical networking and carrier Ethernet assets of Nortel Networks Corporation's Metro Ethernet Networks (MEN) business.

Ciena is a US-based provider of communication network infrastructure, associated software and professional services, while Nortel Networks is a Canada-based provider of networking products and solutions.

Ciena has agreed to pay $530 million in cash and issue $239 million in aggregate principal amount of 6% senior convertible notes due 2017 for a total consideration of $769 million.

A motion to approve Ciena as the acquirer will be heard by bankruptcy courts in the US and Canada on December 2, 2009. The assets to be acquired generated approximately $1,360 million in revenue for Nortel Networks in 2008. The transaction is expected to close in the first quarter of 2010.

Update on November 9, 2009:

Ciena has received regulatory clearances regarding its proposed acquisition of substantially all of the optical networking and carrier Ethernet assets of Nortel Networks' MEN business.

In the US, Ciena has granted early termination of the antitrust waiting period under the Hart-Scott-Rodino Act. In addition, Ciena also has received from the Canadian Competition Bureau a no action letter, terminating the applicable waiting period for the proposed transaction under the competition act.

Announcement (October 5, 2009):

Ciena is planning to acquire substantially all of the optical networking and carrier Ethernet assets of Nortel Networks' MEN business.

Rumor (March 13, 2009):

According to Bloomberg, Ciena is planning to acquire MEN unit of Nortel Networks for about $300 million. Reportedly, Lazard, Ltd. is acting as financial advisor on the sale to Nortel's assets.

Hogan & Hartson LLP is acting as legal advisor to Ciena Corporation and Jefferies & Company, Inc. is acting as financial advisor to Nortel Networks.

Deal Value (US$ Million) 769
Deal Type                Acquisition
Sub-Category             Asset Purchase
Deal Status              Announced: 2009-10-05

Deal Participants

Target (Company)   Nortel Networks Corporation - Optical Networking and Carrier Ethernet Assets
Acquirer (Company) Ciena Corporation
Vendor (Company)   Nortel Networks Corporation

Deal Rationale

The transaction would enable Ciena to enhance its product portfolio with products that carriers can use to transmit video and other internet traffic within cities. These optical and carrier ethernet assets bring technologies, talent and scale that will accelerate Ciena's current strategy to deliver innovative network solutions to customers worldwide. The acquisition will bring together complementary technologies in switching and transport to create an innovative powerhouse with the scale to challenge the industry status quo and offer customers a practical path for transitioning to automated, optical ethernet-based networking.

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