Ciena Receives Clearance for Nortel's Optical Networking and Carrier Ethernet Assets

Ciena has announced that it has received regulatory clearances regarding its proposed acquisition of substantially all of Nortel’s (News - Alert) optical networking and carrier Ethernet assets.

 

 In the United States, Ciena reported that it was 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.

 

As a result of Nortel’s restructuring process, the proposed transaction remains subject to a competitive bidding process. The proposed transaction also requires the approval of the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice and is subject to additional regional regulatory clearances as well as to customary closing conditions.

 

In mid-October, TMCnet reported that United States and Canadian courts had approved the $521 million “stalking horse” bid by Ciena Corp (News - Alert). for Nortel’s optical networking and Ethernet assets. The court set a bid deadline of Nov. 9 and an auction date of Nov. 13.

 

Though most lingering issues were resolved, judges made a few changes to the bidding procedures and a change to the termination provisions of the stalking horse agreement and EMEA agreement, in section 5(e) of the 21-page court document, dated Oct. 15, 2009. As stated in that section: “the Stalking Horse Agreement will be modified to provide that … in the event that the Stalking Horse Agreement is terminated … the Break-Up Fee shall only be payable upon the closing of an Alternative Transaction within 12 months after terminations.”

 

Although Ciena still faces additional regulatory proceedings, the company already has a plan in place for what it will do next.

 

Tom Mock, Ciena’s senior vice president of strategic planning, told TMCnet that with optical networking technology like Nortel’s, operators can provide advanced video, voice and advanced services to end users. This would boost Ciena’s presence in the marketplace among its target market, which includes large enterprises with their own private voice and data networks, as well as large operators.