$512 Million Offer For Nortel

Ciena Corp. is making a bid for Nortel’s ethernet division, making an offer of $512,000,000 for the beleaguered Canadian company’s assets. If successful, Ciena could emerge as a larger player in the North American networking equipment market. The offer is the opening bid in a November auction that speculators say may offer some stiff competition from larger corporations like Nokia and Siemens. Ciena has committed to retaining 85% of the Nortel’s workforce.

Nortel, the century old Canadian telecom giant, suffered in the wake of the so-called ‘dot-com bubble’ bursting of 2000-2001. In January 2009, Nortel declared Chapter 11 bankruptcy; as a result, it has discontinued its WiMax business and has sold several of its assets to other tech firms like Radware, Avaya and Ericsson, who acquired Nortel’s mobile-oriented CDMA and 4G divisions over the summer.

Despite Nortel’s long and troubled record, it is still a major networking equipment manufacturer, and the sale of its ethernet division is going to shake up the North American market. Although Ciena has placed the initial bid, the auction – which is still a month away – is anyone’s game at this point.

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