By Roger Cheng
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- If Ciena Corp. (CIEN) were to buy Nortel Network Corp.'s (NRTLQ) optical and carrier ethernet assets, it would spend much of its $180 million in integration expenses early within the first year of the deal's close, according to Ciena Chief Executive Gary Smith.
Ciena's made a $521 stock-and-cash "stalking horse bid" for the assets, which means other bidders can come in. But if the company succeeds, Smith said he was "very confident" that the deal would add to earnings during fiscal 2011.
The two businesses have complimentary products and little overlap, Smith told analysts during a conference Wednesday. He added that the company expects to realize some merger cost savings, but said it was too early to comment on them.
Chief Financial Officer James Moylan said the deal carries a break-up fee of $16 million, along with $5 million in additional expense reimbursement.
If a deal is struck, Smith said the company would hire up to 2,000 Nortel employees, or 85% of the acquired business. The deal would close in the first calendar quarter of 2010.
-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com