Nortel confirmed Monday that United States networks firm Ciena is in "advanced discussions" to acquire the former telecom giant's metro ethernet networks business.
Ciena plans to submit a bid for the business through the bankruptcy proceedings Nortel is undergoing. Nortel has been trying to sell the business for a year, but so far no buyers have stepped up to pay the $1 billion to $2 billion price tag Nortel wanted.
The division supplies network gear that provides communication systems to concentrate urban areas worldwide. In its most recent quarter, the company posted sales of over $330 million. One year ago, it had sales of $1.8 billion.
The division has about 1,500 employees, with 1,000 of them working between Ottawa and Montreal. The Ottawa office initially developed the ultra-high speed gear that powers the metro ethernet operation.
One analyst said Nortel may only receive $800 million for the metro ethernet business, which would put Ciena in a difficult financial position.
Ciena previously purchased two other Ottawa companies: Akara in 2003, and Catena Networks in 2004.
Neither Nortel nor Ciena stated when the deal is expected to conclude.
