Nortel Sell-Off Continues: Ethernet Business To Ciena?


The 2009 sell-off of Nortel Networks continues, piece by piece.

The latest is the proposed sale of Nortel's optical networking and carrier Ethernet assets -- collectively, Nortel's Metro Ethernet networks business -- which, according to a statement from Nortel, has entered the advanced talks stage with Ciena Corp.

Nortel confirmed it is in talks with Ciena -- which makes fiber optic gear for telephone carriers -- but declined additional comment. Ciena also confirmed the talks in a separate statement.

"The outcome of these discussions is uncertain and subject to negotiation of definitive agreements," Nortel said in its statement.

The Metro Ethernet networks business is the third major piece of Nortel that appears to have found a buyer since Nortel entered bankruptcy protection in January 2009.

Sales in the Ethernet division, per Nortel's most recent earnings statements, were $333 million in the second quarter, a 27 percent decline year over year. For fiscal 2008, the division reported revenue of $1.39 billion, down 8.7 percent from 2007.

Nortel in June sold its CDMA and LTE Access carrier wireless division to Ericsson for $1.13 billion.

In September, Avaya emerged as the winning bidder for Nortel's enterprise solutions business, agreeing to pay $900 million plus $15 million for an employee retention program -- a transaction currently under review by Canadian government regulators.