Sorry NSN, but Ciena will get Nortel's optical division

After losing out to Ciena, Nokia Siemens Networks' made one last ditch effort yesterday to bid on Nortel's optical network division by not only upping its paying price, but also filing an objection to the deal in Canada and U.S. bankruptcy courts.

Last week, Ciena beat out NSN in an auction for the assets with a $769 million bid in cash and convertible notes. Then, this week NSN said it would up its offer for the unit to $810 million.  

However, some analysts yesterday questioned NSN's price and did not think a purchase by NSN would improve industry structure.

"We believe a combined NSN-Nortel MEN will have only 14% market share in the terrestrial optics market and does not help in improving market structure significantly in this highly fragmented industry," said Maynard Um, IT Hardware & Wireless Equipment Analyst for UBS. "It does provide exposure to key North American customers but does not solve NSN's primary issue of declining market share in wireless."

In the end, the bankruptcy courts in Canada and the U.S. dismissed NSN's claim and approved the sale of Nortel's optical networking and carrier Ethernet businesses to Ciena as well as the sale of its GSM and GSM-R business to Ericsson and Kapsch CarrierCom AG. Ciena is not completely out of the woods entirely as the sale still needs approval from courts in France and Israel.

This last chapter in the fight for Nortel's MEN assets came shortly after NSN's CEO Rajeev Suri allayed fears that the company is nearing death during Nokia's Capital Markets Day in Espoo, Finland. As reported in a LightReading Europe article yesterday, Suri said that "reports of our death are not only greatly exaggerated, but they are totally false," he said, before adding, "We are winning where it matters."

For more:
- see the official release here
- LightReading has this analysis

Related articles

NSN takes another pass at Nortel's MEN
Ciena becomes victor in fight for Nortel's MEN
Nortel unit auction Friday, NSN reportedly in
Nortel narrowed its loss in the third quarter
No done deal yet in Nortel's optical sale
NSN may be moving on Nortel's Ethernet unit
Ciena crafts deal for Nortel's Ethernet assets

Suggested Articles

Deutsche Telekom's T-Systems subsidiary has deployed VMware's disaster-recovery-as-a-service platform on its Dynamic Services for Infrastructure (DSI…

Google is investing 3 billion euros ($3.3 billion) to expand the company's data footprint across Europe over the next two years.

When it comes to its fiber deployments, Verizon is hitting its stride, according to Verizon Chairman and CEO Hans Vestberg.