In an acquisition that will double its size, Ciena Corp. announced last week that it will buy the optical networking and carrier ethernet business of bankrupt Nortel for $769 million, after it trumped Nokia Siemens Networks in a three-day auction.
Ciena’s winning offer consists of $530 million in cash and $239 million in convertible notes, says a source speaking on condition of anonymity since details of the auction have not been made public. Nortel, a Canadian telecommunications company, filed for bankruptcy in January and has been auctioning off its assets since.
The final bid by rival Nokia Siemens, which had teamed with private equity firm
“Nokia Siemens Networks believes that its final offer represented fair value for the assets, and further bidding could not be financially justified,” it said in a statement.
Nokia Siemens—which is struggling to make a profit and faces an aggressive rivalry from Huawei—was looking to strengthen its position in North America, where it made sales of just $189.6 million in the region in September quarter, less than 5% of the group total.
Nokia Siemens lost a similar auction in July, when bigger rival Ericsson outbid it for Nortel’s CDMA assets. —Anupreeta Das and Tarmo Virki, Reuters