Bankrupt Nortel managed to exit another loss making business division of Optical Networking and Carrier Ethernet with Ciena bagging the deal pushing aside Nokia Siemens Networks which earlier was ousted by Ericsson for Nortel’s CDMA assets.

Ciena bagged the deal under a mix of cash and debt with the cash component being $ 530 million and $ 239 million convertible bonds thereby making a total deal of value $ 769 million. Ciena will also absorb about 2,000 employees of Nortel under its fold.

Pending court approvals in US, Canada, France and Israel the deal is expected to close by first quarter of next year.

Ciena is believed to have gained new clients in Asia and Europe including Telefonica of Spain.

In the last quarter ended September 30, 2009 Nortel’s optical networking division had posted a 26% decline in sales at $ 295 million.

“Ciena's commitment to the future of our product platforms, customers and employees represents an exceptionally positive outcome to a challenging journey that started over a year ago," said Philippe Morin, president of Metro Ethernet Networks, Nortel.

"These optical and carrier Ethernet assets bring exceptional technologies, talent and scale that will accelerate Ciena’s current strategy to deliver innovative network solutions to customers worldwide," noted CEO Gary Smith.