TORONTO – Insolvent Nortel Networks has confirmed that it will sell its global optical networking and carrier Ethernet businesses to Ciena Corp. for US$530 million in cash plus US$239 million principal amount of convertible notes.
If approved by the courts, Ciena’s purchase will include substantially all product platforms, patents and intellectual property that are predominantly used in the businesses, and provides for the transition of Nortel’s customer contracts, the announcement details.
A minimum of 2,000 Nortel employees, or more than 85% of the division’s employee base, will receive job offers from Ciena.
The sale is subject to court approvals in the U.S. and Canada, which Nortel will seek at a joint hearing on December 2, 2009, and in France and Israel. U.S. and Canadian antitrust clearance for the sale has already been obtained, and Nortel said that it is aiming to close the sale in the first quarter of 2010, subject to the timing of obtaining other regulatory approvals.
The two companies originally entered in to a ‘stalking horse’ asset sale agreement back in October.
