M&A

3 November, 2009

NSN may rival Ciena in bid for Nortel unit-report

NEW YORK, Nov 3 (Reuters) - Nokia Siemens Networks [NSN.UL] may challenge Ciena Corp (CIEN.O) with a rival bid for the ethernet business of Canada's bankrupt telecommunications equipment maker Nortel Networks (NRTLQ.PK), Bloomberg reported on Tuesday.

The report, quoting people familiar with the matter, said that the assets would help Nokia Siemens, a joint venture of Nokia (NOK1V.HE) and Siemens (SIEGn.DE), expand in North America.

Officials at Nokia Siemens, as well as those at Nortel and Ciena, declined to comment.

Nortel in October agreed to sell its optical networking and Internet infrastructure business to U.S. network gear maker Ciena for $521 million, part of a series of sales following its bankruptcy.

The agreement includes all assets of Nortel's metro ethernet businesses, among them long-haul optical transport gear, switching technology, and network management software.

Ciena's offer of $390 million cash and 10 million Ciena shares is a stalking horse offer, which sets a floor price. That means Nortel may receive competing bids, but any other prospective purchaser would have to pay more.

The latest report comes after Nokia Siemens' new chief executive Rajeev Suri told Reuters earlier in the day that the company is looking for well-priced and sensible acquisitions. The company lost the auction for Nortel's CDMA and LTE advanced wireless operations earlier this year, leaving a mostly unused credit line.

Nokia Siemens also said on Tuesday that it aims to cut up to 5,800 jobs and save more than 1 billion euros ($1.48 billion) to stay competitive in an increasingly competitive market.

Nortel, once North America's biggest telecommunications equipment company, filed for bankruptcy protection in January. It is selling off its assets rather than trying to restructure. ($1 = 0.6769 euro) (Reporting by Ritsuko Ando and Tarmo Virki)

Source: http://www.reuters.com