The $900M merger is expected to take place in 2Q or 3Q of this year

February 18, 2002

1 Min Read

LINTHICUM, Md. - February 18, 2002 - CIENA* Corporation (NASDAQ: CIEN) and ONI Systems* (NASDAQ: ONIS) today announced a definitive agreement under which the companies would combine to form a new next-generation optical networking leader. Under the terms of the agreement, all outstanding shares of ONI common stock will be exchanged at the ratio of 0.7104 shares of CIENA common stock for each share of ONI common stock, which will represent approximately 24% ownership of the combined company. Based on the closing price of CIENA stock on Friday, February 15, 2002, the deal is valued at approximately $900 million.

"We're combining CIENA, the leader in core optical networking and switching, with ONI, the leader in metropolitan optical networking, to create a new, stronger, next-generation optical networking leader," said Gary Smith, CIENA's president and CEO. "With this acquisition, CIENA dramatically expands its metropolitan presence. We also further improve the economics of network ownership for our customers by enhancing our ability to offer carriers the most comprehensive, next-generation optical networking solution."

"This is a different kind of combination for a different kind of market," continued Smith. "Much of the rationale of this union comes from the synergies that can be gained by CIENA and ONI joining forces. Together, we can combine our efforts, consolidate our resources and target new market opportunities. As a result, we expect to accelerate CIENA's return to profitability."

CIENA expects the transaction will result in annualized operating expense synergies of $55 to $65 million for the combined company, as well as additional manufacturing efficiencies. It is estimated that the combined company would have approximately $1.3 billion of cash net of debt as of January 2002.

Ciena Corp. (Nasdaq: CIEN)

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