After a three-day auction, a story in Reuters broke this morning that Ciena had beat out Nokia Siemens Networks to acquire Nortel's Metro Ethernet Networks (MEN) and optical divisions for $769 million. Ciena will fund the acquisition with $530 million in cash and $239 million in convertible notes. In October, Ciena submitted a $521 stalking bid for the unit.

Working with private equity firm One Equity Partners, one source said that Nokia Siemens Networks came "very close" to Ciena's offer in the three-day extended auction [1] and that "further bidding could not be justified."

Losing out to Ciena for Nortel's MEN assets is a blow to Nokia Siemens Networks, which has struggled to gain a bigger foothold in the North American telecom market. NSN's overall North American revenues were only $189.6 million as of September. Previously, NSN lost out to Ericsson in its bid to acquire Nortel's CDMA and LTE assets.

Still, Ciena is not completely out of the woods. While the acquisition will enable Ciena to increase sales, analysts are worried that the deal 'will weigh down Ciena's operations.' At issue is the fact that Ciena, which reported $902 million in annual revenues, will have to integrate a company with $1 billion in annual revenues.

On December 2, 2009, U.S. and Canada bankruptcy courts will hear motions to approve Ciena as the acquirer of Nortel's MEN assets.

For more:
- Reuters has this article [2]

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