The deal announced Wednesday covers the Nortel Optical Networking and Carrier Ethernet businesses, which have been considered among the best assets yet to be sold by Nortel.
Nortel said its agreement with Ciena calls for the Linthicum, Md.-based company to offer jobs to at least 2,000 employees, or more than 85 percent of total at Nortel's Optical Networking and Carrier Ethernet business units.
However, there's no guarantee the deal will close as announced since Ciena's offer will be used as an opening bid for an auction by Nortel.
In previous auction of Nortel business units this year, the final prices have been substantially higher than the initial "stalking horse" bids.
In this case, Ciena is offering $390 million in cash and 10 million shares of Ciena common stock. The shares are currently worth about $131 million.
Nortel, a former telecommunications equipment giant that at one point accounted for one-third of the market value on the entire Toronto Stock Exchange, filed for bankruptcy protection in Canada and the U.S. in January.
The Toronto-based company has been selling its operations piece by piece.
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