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Telecom equipment manufacturer Nortel Networks has reportedly agreed to Ciena Corp’s (News - Alert) stalking horse bid of $521 million for its optical networking and carrier ethernet businesses.

 

The offer, for which Ciena said it will pay $390 million in cash plus 10 million in common shares, includes Nortel’s (News - Alert) business assets, plus patents and other intellectual property, according to reports.

 

Ciena has said it plans to retain 2,000 Nortel employees, or 85 percent of the Nortel workforce.

 

According to a brief statement put out by Toronto-based Nortel, current discussions with Ciena are uncertain and subject to negotiation of definitive agreements. Additionally, any agreements would be subject to a competitive bidding process to be approved by the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice.

The news comes nearly one month after the equipment manufacturer announced plans to sell its enterprise and government assets to UC service provider Avaya for $990 billion.

Under terms of the agreement, Avaya – which Joel Hackney (News - Alert), Nortel’s president of Enterprise Solutions, said beat out two other bidders – will retain at least 75 percent of the Nortel’s current workforce in its government, enterprise solutions and DiamondWare (News - Alert) Ltd., divisions.

 

“This announcement removes another layer of uncertainty,” Hackney said during a 25-minute conference call with media and analysts, in mid September. “All of you know the challenges we’ve been faced with in this environment. But we’ve never wavered in our strategy and our commitment to customers.”

 

Avaya (News - Alert) provides unified communications, contact centers, and related services directly and through its channel partners to enterprises worldwide.